Nomura says its interactions with cement dealers across India suggest demand was weak in the January-March period because of lower use of cement by government-related projects, reports Dow Jones. However, recovery is anticipated going forward on expected increases in government spending.
"This weakness can be attributed to lower spending by the government as it tried to meet its fiscal deficit target for FY15," says Nomura. Though volumes were weak in the first quarter of the calendar year, dealers sounded relatively more optimistic on volume growth in upcoming months, particularly in the eastern region, Nomura says.
Demand is expected to recover on higher government spending on infrastructure projects with higher allocations for roads and railways and Nomura estimates cement volume growth of about 7.8 per cent for fiscal 2016, the report added.