Indian Cement Industry - Confluence Of Growth, Efficiency, Frugality In The Current Cycle: Systematix
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Systematix Research Report
Barring some Covid-19-led weakness, cement demand has remained strong over the last three years.
We remain sanguine about the long-term cement demand outlook given the government’s thrust on infrastructure development and affordable housing, rapid urbanisation and a rising working-age population.
While capacity additions in the industry are likely to continue, incremental supply will be lower than incremental demand.
We expect a clinker capacity compound annual growth rate of 4.7% against a demand CAGR of 8.6% between FY21-24E.
The Ebitda/tonne of our coverage universe is expected to grow at a CAGR of 2.2% over FY21-24E, leading to improvement in the average return on equity/ return on capital employed.
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