Rural development may create incremental demand for cement companies
The allocation of Rs 1.2 lakh crore for rural development and panchayati raj may create incremental source of demand for cement companies in the coming quarters. The allocation comes at a time when the industry is at the cusp of demand turnaround. This is reflected in the year-on-year rise of 3-5 per cent in all India cement prices in the first fortnight of January. The price range is Rs 335-340 per 50 kg bag. According to industry estimates, infrastructure provides 15 per cent of the total cement demand. Given this, large cement companies with strong balance sheet and diversified geographical presence, focused more on volumes rather than increasing cement prices to secure business. The high allocation as proposed in the latest budget may boost rural housing and infrastructure demand meaningfully. According to the budget speech, farmers' income is expected to grow two times by 2022. This should provide strength to rural consumption which in turn may increase construction activities related to Individual Building Housing (IHB) in rural areas. According to analysts' estimates, rural housing contributes 35 per cent to the cement demand. Read more at: https://economictimes.indiatimes.com/markets/stocks/news/cement-companies-are-likely-to-report-incremental-demand-from-rural-areas/articleshow/73842339.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Tags : ALLIED