InvestorQ : Is it true that Cement companies are cutting down on capital outlays?
diksha shah made post

Is it true that Cement companies are cutting down on capital outlays?

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4 weeks ago
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Cement manufacturers had cut capital expenditure plans due to the fall in demand so as to conserve cash flows. For example, Feb-21 cement output fell 5.5% compared against growth of 7.8% in Feb-20. For first 11 months, the cement output is down 15.5% yoy. Even capacity utilization is lagging at 52.4% in FY21, slight improvement from 45% in the first half of FY21.

One trend is that the cement consumption is growing rapidly in the rural, semi-urban and retail markets compared to the traditional urban markets. Most of this demand has been driven by infrastructure demand. The first focus would be to boost the capacity utilization to above 65% levels before looking at any serious capex.

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