InvestorQ : Why is Fitch positive on the Indian Cement sector?
Rashi Mehra made post

Why is Fitch positive on the Indian Cement sector?

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Archita Jajjoo answered.
8 months ago
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Fitch Ratings has been extremely bullish on the Indian cement sector and has underscored several reasons for the same. Factors like infrastructure focus, thrust to affordable housing, revival in capital investment cycle should all boost the cement sector. Fitch expects the cement demand to growth by around 6-8% in the coming months.

However, there is going to be pressure from a lot of fresh capacities coming up. Due to this spike in new capacities coming up, the capacity utilization rate is expected to drop from 70% to 65%. This will result in lower fixed cost absorption in the case of cement companies. Fitch also noted that price hikes would not be able to fully counter spike in energy and fuel prices.

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