India: beyond the headwinds

Published 03 November 2020

India has become the second-worst affected country by the COVID-19 health crisis. Consequently, construction activity has taken a hit and cement demand saw a dramatic collapse in the April-June 2020 quarter. As the pandemic continues to play out, ICR assesses the impact on domestic cement producers and prospects for recovery.

As COVID-19 exerts unprecedented stress on India’s cement industry, ICR looks at the latest available

data to date for the April-June 2020 period and offers expectations on post-pandemic recovery

The real impact of COVID-19 restrictions has been more pronounced on India’s cement sector than was first estimated at the start of the country’s lockdown in late March. Local producers have experienced some of the worst market conditions, with demand contracting by more than 20 per cent in the 1HFY21 (April-September 2020).

The remainder of the year is unlikely to bode any better given the suppressed state of infrastructure-related activities – be it real estate, road construction, individual housing or several government-backed projects. The new motto for corporates as well as individuals has become ‘cash is king’, which has resulted in less consumer spending and the deferment of expansion projects in a bid to conserve cash and spend only on essential activities.

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