The infrastructure-driven investments ahead of 2024 Lok Sabha elections, are driving a broad-based demand increase in North India, especially Rajasthan. Nearly 40 percent demand is contributed by by the Centre, while the rest 60 percent comes from the residential and commercial sectors in this region.

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However, a strong cement demand is unlikely to stimulate pricing. Nirmal Bang expects the cement demand in the first quarter of FY24 to grow 12 percent at a PAN India level. Ultra Tech cement, the largest player in the Indian cement industry shall declare its results for the quarter ending 30th June, 2023 on July 21st.

In western India, the key drivers of the continuing infrastructure development are the Brihanmumbai Municipal Corporation (BMC) elections later this year and the assembly election in Mumbai. In the first quarter of FY24, the urban housing and real estate activities is expected to increase cement demand by 15 percent year on year in west India with Mumbai involving large demand for roads, motorways and metros development and Gujarat led by Mumbai-Ahmedabad bullet train project, the trans-harbour connection, coastal roads as well as steady growth in urban affordable housing projects.

In South India, the historically underperforming states like Tamil Nadu and Karnataka are expected to see development in their state infrastructure sector. State supplies have increased as Andhra Pradesh and Telangana players have been prevented from shifting volume to Tamil Nadu to capitalise on the price differential. According to channel checks by Nirmal Bang, cement prices have moderated to Rs 330/bag in Tamil Nadu, same as in Andhra Pradesh and Telangana.

In east India, some of the key projects include metro development in Kolkata, Patna and Ranchi, the eastern dedicated freight corridor, several road and rail projects in the North-East, among others. An 18 percent growth in cement demand is expected in the quarter ended June 30, 2023.

Uttar Pradesh will lead the cement demand in central India, which is expected to grow by 12 percent in first quarter of FY24, as per channel checks by Nirmal Bang. Pratapgarh, Deora, Hardoi, Urai, Kanpur Defence Park in Sarh, Ramaipur mega leather cluster, Gorakhapur, Meerut, Balrampur, Basti and Pilibhit are some of the districts that are being developed to become industrial hubs. The state government has provided incentives, unique amenities and concessions to investors/stakeholders in order to expedite the execution of mega projects. In March 2023, the Uttar Pradesh chief minister approved infrastructure projects in Ayodhya totalling Rs 465 crore. The key infra projects include: Urja Ganga gas pipeline project, Varanasi– Kolkata expressway, Lucknow-Agra 8-lane project, Kanpur outer ring road project and the Ganga expressway.

Cement stocks are trading flat on the exchanges on June 27 morning.