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Construction : Cement Update | September 2015 | Source : CW-India

South-based cement firms see demand rising

After years of a bad phase, south-based cement companies are witnessing a gradual pickup in demand. The momentum is expected to sustain as construction activities are expected to pick up in Andhra Pradesh and Telangana. It is estimated that construction activities in these two new states are expected to give rise to demand of 23 mt in the next two years. Also the proximity of their plants to these states is likely to save a lot of freight cost, which is a major cost for the cement companies. Higher cash flows will also help these companies to deleverage their balance sheets, which can lead to re-rating of these stocks.
 
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