Rising costs to dent cement makers' profitability

Analysts peg demand growth at 4-5% in FY19

India's 460-million-tonne cement industry, world's second largest, is likely to continue facing tough times in 2018-19, too. Hit by a mismatch between demand and supply for nearly a decade now, leading to poor capacity utilisation of less than 70 per cent, the sector’s volume has grown in low single digit.
 

Now, despite government's impetus on infrastructure, the sector might face pressure on its profitability, given the rising costs of input materials and muted capacity utilisation levels, which are seen hovering around 65 per cent.

According to a report by ICRA Ratings, cement makers have witnessed rising energy and freight costs on