Growth returned to the cement industry in Jul-Sep’20 quarter

Growth in the cement industry came back in Jul-Sep’20 quarter, as can be seen from the results of India’s top 2 cement companies.

From the investor deck of India’s largest cement company Ultratech Cements:

  • Cement demand rebound in Q2 FY21, with most regions reporting YoY growth.
  • Volume growth was 8% for the quarter on a y-o-y basis. This growth is excluding the Century cement business, so it is like for like growth.
  • Unprecedented growth in Rural consumption

In fact, demand in South India also rebounded in Sep’20. n most regions, the biggest demand driver was rural markets, as well as individual house construction in semi urban or urban markets.

The second largest company, Ambuja Cements, reported a similar trend in its results. It reported revenue growth of 10%, with 2% realisation growth, implying 8% volume growth.

Other major cement companies are yet to come out with their Q2 results.

In all, the scenario for the cement business appears to have been quite good for Q2, irrespective of partial or full Covid lockdowns running in several states in this period.

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