Cement Sector Best To Bet On In 2017

Boosted by India’s overall economic growth, the demand for cement is expected to reach 550-600 million tonnes per annum (MTPA) by 2025. It does not end here. This robust growth rate will further be boosted by the likely introduction of Goods and Services Tax in our country. It will certainly benefit the Indian cement industry. 

- Kaushlendra Singh Sengar

India’s cement sector has outperformed the Nifty. It gives more than a double return at the stock exchange. The outlook for the cement sector in 2017 looks brighter as the economy advances with expectations of accelerated growth in overall consumption across several sectors, including construction and building material. India is the second largest producer of cement in the world. Its cement industry plays the key role in economic growth, providing employment to millions of people. The cement industry was estimated to grow at a CAGR of 11.14% in volume terms during the 2011-17 period.

The cement demand in India is expected to increase due to government initiatives such as the development of 98 smart cities. It may revive the demand for housing in rural areas led by government spending, leading to 45 million tonnes of cement needed in the next three to four years. GST India is likely to have a positive impact on the cement industry.

KEY FACTORS FOR CEMENT INDUSTRY GROWTH

In the Union Budget for 2017-18 the Government proposed to assign infrastructure status to affordable housing projects and facilitate higher investments and better credit facilities. It aimed to provide housing for all by FY 2022 which will boost the cement demand.