Cement demand growth expected to halve this fiscal: Crisil

Cement demand growth is expected to halve to around 5 to 5.5 per cent this fiscal, impacted by weak government spending in first half and liquidity crunch faced by the real estate market, a report by Crisil Research said.

However, the profit margin for the sector would be at a six-year high on account of recent price hikes undertaken by the industry in April-June quarter and lower power and fuel costs, the report said.

"Crisil expects cement demand growth to witness a mid-cycle slowdown to 5 to 5.5 per cent on-year this fiscal, down sharply from 12 per cent in fiscal 2019," said Crisil Research.

According to the report, the demand growth will "bear the brunt of weak government spending in first half which contributes to nearly 35-40 per cent of cement demand and liquidity crunch impacting real estate market which consumes 5-8 per cement..."