Construction Industry News
According to an ICRA analysis, cement volumes are expected to grow 7-8% to approximately 388 million tons in FY2023, helped by demand from both rural and urban housing and the infrastructure sector. The demand for rural housing is supported by a robust rabi harvest and better harvest realisation. The progress of sowing kharif, amid modest increases in the MSPs of such crops for the coming marketing season, would set future agricultural sentiments.
In the infrastructure segment, the significant 24% increase in capital expenditure to Rs 7.5 trillion in the FY23 budget estimates over the FY2022 revised estimates, led by Rs 1.8 trillion for roads and Rs 1.4 trillion for railways, predicts much good for cement demand.
As for urban housing, the report states that, despite potential challenges from rising interest rates, the growth in employee numbers and salaries for many IT/ITES companies, and the demand for better and larger housing due to the shift to urban housing. hybrid operating model at customer segments operating in IT/ITES, BFSI and related industries are likely to support demand going forward.
However, high input costs are likely to negatively impact operating margins, which are expected to be the lowest in the past seven years.
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