‘Cement makers may log operating profit margin of 20% in FY21’

Mumbai: Crisil expects cement makers to report operating profitability of around 20 per cent in FY21 as demand is expected to recover driven by infrastructure and affordable housing sectors.

Stable realisations and benign input prices are also likely to lead to recovery in demand, said Crisil.

It said operating profitability in the current financial year is expected to touch a 7-year high of around 21 per cent, which translates to a 350-400 basis points increase from the year-ago level.


“Demand growth in the infrastructure and affordable housing sectors on a lower base should support volume growth. These two sectors together contribute almost 35-40 per cent of cement demand in India,” said Hetal Gandhi, director, Crisil Research.

Cement prices are expected to remain stable in fiscal 2021 after high volatility seen this fiscal, said Crisil.

The expected recovery in demand and high utilisation of clinker capacities at 78 per cent would restrict any steep decline in cement realisations, the report said.