Budget 2022: Cement sector may shine with infra announcements, say analysts

Schemes to develop rural infrastructure and boost incomes, coupled with an extension of real estate incentives, would be key triggers for the sector in the Budget. A higher allocation to ongoing schemes targeted at the rural segment — be it the Pradhan Mantri Gram Sadak Yojana for the roads sector, the Pradhan Mantri Awas Yojana for housing, or the Mahatma Gandhi National Rural Employment Guarantee Act for rural employment — is expected to drive demand for the cement sector. As will allocating more funds to highways, expressways and other infrastructure projects.

Say analysts at Axis Securities, “Under the NIP (National Infrastructure Plan), the government has ambitious plans to develop the infrastructure landscape of the country. Fast-tracking major highway projects will create more demand for cement.” The brokerage believes that any measures to improve and bring down the logistics cost will augur well for the cement space.

The sector will also benefit from an extension to the multiple sops for the real estate sector that are set to expire in CY2022.

 

Among other measures expected for the sector, which has seen a revival especially on the residential housing segment, are interest subvention on home loans, tax holiday on profits from affordable housing projects, deduction on housing loan interest to be increased to Rs 5 lakh from the current Rs 2 lakh and extension of the credit-linked subsidy scheme under the Pradhan Mantri Awas Yojana.