Cement demand growth may nearly halve to 7% in FY20 on weak Q1 offtake

The bright side is that manufacturers could also benefit as average prices in FY20 are likely to be better than FY19, while costs are likely to be lower

Growth in domestic cement demand is expected to slow down to about seven per cent in FY20, as is also reflected in the relatively weak offtake seen in Q1 of this fiscal.

The growth projection is tepid compared to 13 per cent growth in cement demand in FY2019.

"Although this (slowdown) is likely to affect cement manufacturers, they are likely to benefit from the fact that average prices in FY20 are likely to be better than FY19 while costs are likely to be lower. This is likely to support near term profitability for cement mills", rating agency Icra said.

The cement demand has