‘Cement sector’s capacity utilisation to drop to 65%’

Credit rating agency Fitch Ratings said it believes a sustained gross domestic product (GDP) growth, the government’s thrust on infrastructure and affordable housing, and a revival in corporate capex, will underpin growth of the cement sector.

The rating agency expects India’s cement demand to rise by mid-to-high single digits over the medium term after an estimated mid-teen rebound in the financial year ended March 2022 (FY22

Nonetheless, industrywide utilisation will drop towards 65 per cent from the close to 70 per cent we estimated in FY22 as faster new capacity additions will outpace demand growth.

This will temper cement producers’ pricing power, notwithstanding our expectation the industry will consolidate further.

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