India: adjusting to new times

Published 07 April 2014

The latest financial updates from some of India’s leading cement producers suggest that the long-awaited revival in higher consumption trends is still some way off. The industry remains weighted under slowing demand growth, concerns over capacity utilisation rates and downward pricing pressures. Sector specialists are now calling for stimulus measures to help draw the market out of its current slowdown and help absorb current capacity and expected new volumes.

India’s general elections, scheduled to take place over April and May this year, have failed

to provide the much-ancitipated boost to infrastructure spending

With India’s general elections due to take place this year, cement producers had expected pre-election spending on infrastructure would help stimulate subdued cement demand growth rates. However, reality has fallen short of expectations and the industry remains doubtful whether domestic consumption will reach the five per cent growth forecast for FY13-14. Analysts caution that if the final three months of the current fiscal (ending 31 March 2014) continues the sluggish trend seen in the previous quarter, full-year growth could be less than four per cent – the lowest level of growth seen in India for over a decade.

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