Cement Sales - North-Eastern Region Expected To Out-Perform Others
The Indian cement industry is peaking based on increased infrastructure spending / planned spending by the government. Northeast India with its characteristic of better leverage to public spending trends than its other regional counterparts, is likely to be a major beneficiary of higher government spending.
Economy and infrastructure experts, expect the country's GDP growth to revive on the back of investment on infrastructure. Cement demand growth will in turn revive on the back of demand from such sectors, including roads, railways and urban infrastructure. The assumption is that cement / GDP growth multiplier will go back to levels of 1.2 leading to cement demand growth of 7% / 8% in FY16 and FY17 respectively.
The Indian Northeast region is more leveraged to public spending trends than any other region in India. With increased investment in infrastructure by the government and various projects already in the pipeline, the Indian northeast region should be the highest cement volumes growth region in the country. The actual size of the Northeast cement market in terms of cement volumes might not be significant compared with the total cement market size of the country, but for cement companies who have a sizeable market share and major regional cement players, this region's high growth should help it outgrow peers in cement volumes.
UltraTech, Ambuja, Dalmia as well as Birla Corp. are expected to enhance cement market shares in this region and out-perform peers.
More on Regional Cement Sales Volumes Growth
The Indian cement industry is peaking based on increased infrastructure spending / planned spending by the government. Northeast India with its characteristic of better leverage to public spending trends than its other regional counterparts, is likely to be a major beneficiary of higher government spending.
Economy and infrastructure experts, expect the country's GDP growth to revive on the back of investment on infrastructure. Cement demand growth will in turn revive on the back of demand from such sectors, including roads, railways and urban infrastructure. The assumption is that cement / GDP growth multiplier will go back to levels of 1.2 leading to cement demand growth of 7% / 8% in FY16 and FY17 respectively.
The Indian Northeast region is more leveraged to public spending trends than any other region in India. With increased investment in infrastructure by the government and various projects already in the pipeline, the Indian northeast region should be the highest cement volumes growth region in the country. The actual size of the Northeast cement market in terms of cement volumes might not be significant compared with the total cement market size of the country, but for cement companies who have a sizeable market share and major regional cement players, this region's high growth should help it outgrow peers in cement volumes.
UltraTech, Ambuja, Dalmia as well as Birla Corp. are expected to enhance cement market shares in this region and out-perform peers.
More on Regional Cement Sales Volumes Growth
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