Indian cement demand to rise 7-8% in FY24

Cement demand in India is expected to expand by 7-8 per cent YoY in FY23-24, according to ICRA, the India-based rating agency. Cement prices, meanwhile, are forecast to remain on a par with FY22-23. 

In a recent report by ICRA, the agency found that cement volumes in April 2023 were up 12 per cent YoY at 36.6Mt. Volumes in FY22-23 showed a nine per cent expansion to 391Mt. This growth was driven by demand from the housing and infrastructure sectors and due to the low base effect of 1QFY21-22, which was impacted by the second wave of the pandemic. Volumes in FY23-24 should reach 415-420Mt, marking a 7-8 per cent improvement, says ICRA. 

Average cement prices in May 2023 stayed at the same level as the previous month, coming in at INR370/bag. Prices for FY22-23 were around INR375/bag, on a par with the previous year. Coal prices in June 2023 saw a 41 per cent YoY decline and a seven per cent contraction MoM, with petcoke prices falling even further, down 47 per cent YoY. According to ICRA, this easing of input costs should help improve operating margins, with margins forecast to increase by 230-270bps YoY to 16.3-16.7 per cent in FY23-24.