Cement firms to maintain growth rates

Cement firms to maintain growth rates
Published: 20 July 2007

Cement companies in northern India saw good sales but static prices in April-June quarter, while those in southern and western parts saw sluggish volume growth but better prices, analysts said.  
 
Consequently, the profit growth of all these companies was likely to be just about maintained compared to previous quarters, they said.  
 
India Cements Ltd. was forecast to post a net profit growth of 10 per cent to INR1.55bn.  
 
The company would gain from the merger of Visaka Cement with itself, brokerage Sharekhan said in a report.  
 
Madras Cement is expected post a net profit growth of four per cent at INR864m. Its dispatches grew by 14 percent.  
 
The firms, however, are expected to show good growth in the coming quarters due to high demand and better price realisations, analysts said.  
 
"If the price increase is in line with inflation, then it will help in negating any cost inflation," one of them said. "Volume will be the key driver for earnings."  
 
Analysts also said there would not be any significant capacity addition before the second half of 2008/09.  
 
Demand and supply could match each other 2007/08 in northern India, though a mismatch would continue in the west and south, they added.  
 
India has nearly 50 cement makers operating 430 plants with an annual capacity of 177 million tonnes. Producers have announced plans to add another 100 million tonnes by 2009/10.