India Ratings maintains stable outlook
India Ratings and Research (Ind-Ra) has maintained a stable outlook on cement manufacturers for financial year 2017-18 due to stable demand growth, despite an increase in input cost. The rating agency also expects cement prices to go up during FY 2017-18 on stable demand. "Ind-Ra expects stable cement demand to enable cement manufacturers to pass on increases in cost during FY18," it said. It expects the credit profile of cement manufacturers to remain stable on stable operating profitability and in the absence of debt-led capex. The operating profitability of cement manufacturers in the next financial year to be around the FY16 and estimated FY17 levels on increase in government expenditure, according to the agency. Ind-Ra has revised down its growth estimates for the cement industry to 3%-3.5% in the current financial year from 4%-6% earlier due to a blip in demand due to demonetisation. It, however, expects the cement industry to grow 4%-5% year-on-year in the next financial year, driven largely by the demand from infrastructure activities and a revival in housing demand in rural areas, both led by government spending.
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