Operating profit would fall by 10 percent

The real sector, which was slightly shaken by the corona epidemic, is back on track. It’s going strong all over the country. In this context, ICRA expects the cement industry to grow significantly by 18 to 20 percent in the 2022-23 financial year and the growth would be 6 percent higher than before. However, it explained that operating profits would fall by 440 to 480 basis points due to factors such as higher production costs. ‘2022 will see 18 to 20 percent growth.

Sales will be around 355 million metric tons. This is 6 percent more than the sales before Covid. This situation is due to the rising demand for rural housing, ”ICRA said in its report. ICRA AVP and Sector Head Anupama Reddy said that while sales increased by 5 percent, operating profit per metric ton would fall by 10 percent. This is due to the increase in the cost of production. An increase of 12 percent in raw materials, 31 percent in fuel and 5 percent in transport charges has had an impact on the cost of production.

The report estimates that cement productivity will increase by 25 percent to 290 million metric tons in the first ten months of the 2022 financial year, compared to the first ten months. It was 4 percent higher than in the first ten months of the previous fiscal year 2020.