India stands the second rank in the production of cement in the world. It produces more than 7% of global capacity.
India is now focused on vast potential development in the infrastructure & construction sector and the cement sector is expected to get a large benefit from it. The recent initiatives, such as the development of 98 smart cities, are expected to provide a major booster to the cement industry.
With some suitable Government foreign policies, several foreign players have also invested in India in the past. Another factor that is the growth factor for this sector is the ready availability of raw materials limestone and coal for making cement.
Production of Cement in India reached 329MT in FY20 and is estimated to reach 381 MT by FY22. Whereas, the consumption stands at 327MT in FY20, which will reach 379 MT by FY22. As the country has a high quantity and quality of limestone deposits.
As per the report of CLSA, the Indian cement sector is witnessing huge improved demand. Major players reported by the company are ACC, Dalmia, and UltraTech Cement. In the second quarter of FY21.
Due to sharp recovery in rural areas and unlocking of the country demand for the industry will increase, and the cement companies also reported a sharp rebound in earnings due to rise in demands.
Which can be seen further in upcoming quarters due to unlocking of the country.
The Indian Government has approved investment schemes to help private sector companies:-
In this Union Budget 2021-22, the Government extended benefits, under Sec-80-IBA of the Income Tax Act, until March 31, 2021, to promote affordable rental housing in India.
In the Union Budget 2021-22, the government outlaid Rs. 1,18,101 Cr. for the Ministry of Road Transport and Highways.
In the Union Budget 2021-22, the National Infrastructure Pipeline (NIP) expanded to 7,400 projects from 6,835 projects.
The Union Budget allocated Rs. 13,750 Cr. and Rs. 12,294 Cr. for Urban Rejuvenation Mission: AMRUT and Smart Cities Mission and Swach Bharat Mission, and Rs. 27,500 Cr has been allotted for Pradhan Mantri Awas Yojana.
Some of the eastern States of India are likely to be the new and untapped markets for cement companies and which could contribute to their bottom line shortly. India could become the major exporter of clinker and grey cement to nations like the Middle East, Africa, and other developing parts of the world in the next 10 years.
The cement plants near the ports, like the plants in Gujarat and Visakhapatnam, have an added advantage for export and will logistically be well armed to face stiff competition. The country's cement production capacity is expected to reach 550 MT by 2025.
Due to an increase in the demand in various sectors like housing, commercial construction, and industrial construction, the cement industry is expected to reach 550-600 MTPA by 2025.
The top 5 major players in the Cement Industry in India are as follows:
- Ultra Tech Cement with a market share of 31% and with a good brand name has given almost 79.82% return even in the conditions of the pandemic. The company has a market cap of Rs 1,97,688.61cr is also termed as the giant of the cement industry.
- Ambuja Cements has a market share of 21%, is a part of global leader Lafarge Holcim. This company has delivered a 77.33% return at the time of the pandemic. It also holds a market cap of Rs 67,323.30 Cr.
- ACC Cements holds a 12% market share it is also a leading player in building materials with a presence at the pan India level, With a market cap of Rs 38,418.46 Cr. ACC Ltd has delivered 60.58% returns during the last year.
- Shree Cement ltd, with a 10% market share in the Indian cement industry it is also termed as a multi-bagger in this space, it holds the second-largest market cap of Rs 1,05,107.37Cr after Ultra tech Ltd. With a high ticket price of Rs 28,982 per share, the company has delivered 36.87% returns during the last 1 year.
- Dalmia Bharat holds an 8% market share in this industry and stands 5th in terms of market cap among all the cement giants in India. The company holds a market cap of Rs 33,064.60Cr. It has delivered a huge return of 217.94% in the last 1 year.
Note: These figures can be varied according to the market prices.
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