Industry Overview :
India is the second-largest cement manufacturer with 139 cement plants, 365 mini plants & 40 players. India’s cement demand is expected to reach 550-600 Million Tonnes Per Annum (MTPA) by 2025.
A few companies dominate the Indian cement industry. The top 20 cement companies account for almost 70 percent of the total cement production in the country. A total of 188 large cement plants together account for 97 percent of the full installed capacity in the country, with 365 small plants accounting for the rest. Of these large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan, and Tamil Nadu.
India has a lot of potential for development in the infrastructure and construction sector, and the cement sector is expected to benefit from it primarily. Some of the recent major government initiatives, such as the development of 98 smart cities and large Infrastructure projects leading to 45 million tonnes of cement needed in the following three to four levels, are expected to boost the sector significantly.
To meet the rise in demand, cement companies are expected to add 56 MT capacity over the next three years. As a result, the cement capacity in India may register a growth of eight percent by next year-end to 395 MT from the current level of 366 MT. It may increase further to 421 MT by the end of 2017. The country’s per capita consumption stands at around 190 kg.
Expecting such developments in the country and aided by suitable government foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past. A significant factor that aids the growth of this sector is the ready availability of the raw materials for making cement, such as limestone and coal.
The housing sector is the biggest demand driver of cement, accounting for about 67 percent of the total consumption in India. The other significant consumers of cement include infrastructure at 13 percent, commercial construction at 11 percent, and industrial building at 9 percent.
Company overview
Share Holding pattern BSE Data
Financials and Ratios. [table id=26 /]
Future Prospects: Recent Deal in-between Holcim-Lafarge is very important. Due to the CCI decision, They need to sell Lafarge units to Nirma, but Synergy is very important.
A more critical issue is the consortium of a Cement manufacturer, even if India is the second-largest Cement manufacturer! Expand, but the ratios of Cement manufacturers are not looking good. This will not make a monopoly but make India one of the critical markets for the parent.
Corporate governance was always an issue with them when Holcim decided to use the Cash of Ambuja for Their own. Though there are tremendous opportunities in the sector, corporate governance and the way management works make Cement manufacturers less attractive. That is why many Investors Choose housing finance companies to get Profit from housing growth, not Cement manufacturers.
