CRISIL Forecasts Indian Cement Profitability Rise

S&P Global — CRISIL Ratings, a financial services and analytics firm, has released a report forecasting a significant increase in profitability for Indian cement manufacturers this fiscal year. Operating margins are projected to grow by 250-300 basis points, driven by improved realisations from volume growth and premiumisation, alongside stable input costs. Cement volume is expected to rise by 6.5-7.5% year-on-year, with an accelerated 8-9% growth in the second half of the fiscal year due to pent-up demand and better liquidity. While the Indian government's reduction of the goods and services tax (GST) rate from 28% to 18% will put downward pressure on retail prices, premiumisation and higher demand are expected to offset this, leading to an overall improvement in realisations for manufacturers. Power and freight costs are projected to fall, contributing to stable overall costs, despite elevated raw material costs due to higher limestone prices. Sehul Bhatt and Sachidanand Choubey of S&P Global — CRISIL Ratings Intelligence provided insights into these trends.