Indian Economy Overview-2009-2010:

India’s GDP growth for 2009-10 was at 7.2 per cent, up from 6.7 per cent recorded in 2008-09. In
the latest estimates for third quarter of 2009-10, country’s GDP stood at 6 percent corresponding to
the growth of 6.2 percent during same period of 2008-09. With an assumption of a normal
monsoon and sustainable good performance of the industry and services sectors, the latest RBI
projection placed the real GDP growth at 8.0 per cent for the year 2010-11.

According to the latest IMF projection, India will grow at 8.8 percent during the year 2010.

Indian industry recovered substantially in the latter half of 2009-10. The IIP figures available for
the entire fiscal shows industrial production register growth of 10.4 percent as against 2.8 percent
during the same period of 2008-09.

At the disaggregated level, all three sectors, i.e. mining, electricity and manufacturing witnessed a
perceptible growth during the year 2009-10. The manufacturing sector, in particular, contributed
significantly to this overall strong performance with a comprehensive growth of 10.9 percent
during the period. As per used based classification, capital goods industry led the frontier attaining
growth of 19.2 percent during 2009-10. The consumer goods sector secured a robust growth of 7.4
percent on account of consumer durables segment.

In 2009-10, fourteen (14) out of seventeen industries achieved higher growth than in the previous
year 2008-09. Only three sectors namely the food products, beverages, tobacco & related products
and jute textiles have still continued to suffer from discernibly low growth in output.

Core sectors grew at a satisfactory rate of 5.5 percent in 2009-10 as compared to 3.3 percent
growth in the previous fiscal. The growth was mainly on account of the cement industry sector
followed by coal and power sectors.

The rise in inflation continued even in March 2010; the overall inflation headed 9.9 percent during
the month whereas the rate of inflation was only 1.3 percent in March 2009. The upward pressure
on prices of food articles and fuel commodities pushed up the aggregate price level of the
economy.

The Reserve Bank raised the repo and reverse repo rates by 25 basis points each on March 19,
2010 to anchor inflation expectations.

(M3) Broad money supply increased by 17 percent during the year 2009-10. This growth was
slightly lower than the growth of 18.4 percent posted during last year.

Over the year 2009-10 the expansion of aggregate deposits was around 17 percent corresponding
to the expansion by 19.9 percent seen during the same period last year

The increase in bank credit was marginally lower at around 16.7 percent while it was 17.5 percent
during the same period of the preceding year. After a phase of deceleration, there has been a
restoration in the flow of bank credit observed since November 2009. As a consequence the
indicative target of 16.0 per cent credit growth as set by RBI for the year was exceeded up to mid-
March 2010.

In response to the large capital flight in portfolio investments throughout the year, Indian stock
market portrayed an optimistic picture in the financial year 2009-10. As a result the BSE sensex
rose from 9 k points in April 2009 to 16 k points in March 2010. Nevertheless, during the third and
fourth quarter of 2009-10 the BSE sensex remained between 16 k to 17 k points.

Fiscal deficit has been found to be reticent with a modest increase of 24 percent during the period
from April to February 2010 while the growth was 33 percent during the same period of 2008-
09.During this period of 2009-10, the level of fiscal deficit stepped up from Rs 307133 crores in
2008-09 to Rs 380901 crores in 2009-10.Growth in the gross tax revenue decelerated in February
 2009-10. The slide in overall tax collection was mainly on account of the weak collections in
indirect taxes.

Indian merchandise trade managed to recover from the severe impact of global turmoil. India’s
export seems to gather momentum as it saw a tremendous growth of 54.1 percent during March
2010 compared to negative growth of (-)33.1 percent in March 2009. However, taking the entire
year 2009-10, Indian exports contracted by (-) 4.7 percent while the growth figure was positive 3.4
percent during 2008-09.

Capital flows continued to remain buoyant throughout the year 2009-10. During the year 2009-10
total foreign investment amounted to be USD 66.5 billion as against USD 21.3 billion recorded
during the same period last year. This confirms more than a three- fold increase in capital flows
over the preceding year 2008-09.

India’s foreign exchange reserves increased by US$ 27.1 billion during 2009-10 to reach US$
279.1 billion at the end of March 2010. This is mainly ascribed to higher capital inflows in the
form of portfolio investments during the year 2009-10.

CURRENT ECONOMIC PROFILE OF INDIA:

Gross Domestic Product (GDP) {current prices} in the year 2009-10: US$ 1,264.40 billion (Rs.
58,68,331 crore) (Est.)

Gross Domestic Product (GDP) {current prices} in Q4 of 2009-10: US$ 349.43 billion (Rs. 16,21,812
crore) (Est.)

Gross Domestic Product (GDP) {constant (2004-05) prices} in the year 2009-10: US$ 961.89 billion
(Rs. 44,64,081 crore) (Est.)

Gross Domestic Product (GDP) {constant (2004-05) prices}in Q4 of 2009-10:US$ 259.69 billion (Rs.
12,05,119 crore) (Est.)

Per capita income (at 2004-05 prices) during 2009-10: US$ 720.23 (Rs. 33,588) (Est.)

Per capita income (current prices) during 2009-10: US$ 950.87 (Rs. 44,345) (Est.)

GDP composition by sector during 2008-09: Services 57.0%, Agriculture 17.1%, and Industry 25.9%

Forex Reserves: US$ 273.36 billion (for the week ended May 21,2010)

Exports: US$ 16.89 billion (Rs. 75147 crore) (April 2010)

Imports: US$ 27.31 billion (Rs. 121517 crore) (April 2010)

Amount of FDI inflows during 2009-10: US$ 25.89 billion (Rs 1,23,378 crore) (April 2009-March
2010)

Cumulative amount of FDI Inflows: US$ 132.43 billion (Rs 5,77,108 crore) (August 1991 to March
2010)
Sectors Attracting highest FDI inflows: Services Sector, Computer Software & Hardware,
Telecommunications, Housing & Real Estate, Construction Activities, Power, Automobile Industry,
Metallurgical Industries, Petroleum & Natural Gas and Chemicals.

Top Investing Countries: Mauritius, Singapore, U.S.A., U.K., Netherlands, Cyprus, Japan, Germany,
U.A.E and France.
PORTER’S 5 FORCES IN CEMENT INDUSTRY
INDUSTRY:

THREAT OF
NEW
ENTRANT
ENTRANT-
LIMITED

BARGANING BARGANING
INTER FIRM
POWER OF POWER OF
RIVALRY-
SUPPLIERS- BUYERS-
HIGH
VERY HIGH LIMITED

THREAT OF
SUBSTITUTES
LOW

THREAT OF NEW ENTRANT: The threat of a new entrant in cement industry is limited. High
capital investment, requirement of broad distribution network and over supplied market deter new
entrants. Access to limestone reserves also act as a significant entry barrier.
BARGANING POWER OF SUPPLIER
SUPPLIER: The bargaining power of suppliers is very high. The
licensing of coal and limestone reserves supply of power from the state grid and availability of railways
for transport are all controlled by a single entity, which is the gov
government.
BARGANING POWER OF BUYERS
BUYERS: The bargaining power of buyers is limited.
limited Rising share
of retail purchase, declining share of bulk purchase by the government has taken away the bargaining
power of the customers.
THREAT OF SUBSTITUTES:: The threat of substitution is low. Only bitumen in roads and
engineering plastics in building offer some element of competition otherwise no close substitutes are
popular in India.

INTER FIRM RIVALRY: The

he inter firm competition is very high. Due to large number of players
in the industry and very little brand differentiation to speak of, the competition is intense with players
resorting to expanding reach and achieving pan India presence
presence.
The high bargaining power of government and intense competition has resulted in the industry going
in a consolidation phase. Smaller companies which do not have access to captive power plant or don’t
have mining leases for coal and limestone mines find it difficult to maintain their bottom line. As a
result they either try to merge with larger players or liquidate their business.
CEMENT
T MANUFACTURING PROCESS
PROCESS:

There are two general processes for producing clinker and cement in India: a dry process and a wet
process. In general, the dry process is much more energy efficien
efficientt than the wet process, and the semi-wet
semi
somewhat more energy efficient than the semi semi-dry process. The semi-dry dry process has never played an
important role in Indian cement production and accounts for less than 0.2% of total production.
Over the last decade, increased preference is being given to the energy efficient dry process technology so
as to obtain a cost advantage in a competitive market. Moreover, since the initiation of the decontrol
process, many manufactures have switched over from the wet technology to the dry technology by making
suitable modifications in their plants. Due to new, even more efficient technologies, the wet process is
expected to be completely phased out in the near future. In 1960, around 94% of the cement plants in India
used
sed wet process kilns. These kilns have been phased out over the past 46 years and at present, 96.3% of
the kilns are dry process, 3% are wet, and only 1% are semidry process. Dry process kilns are typically
larger, with capacities in India ranging from 30
300- 8,000 tonnes per day (tpd) (average of 2,880 tpd). While
capacities in semi-dry
dry kilns range from 600
600-1,200
1,200 tpd (average 521tpd), capacities in wet process kilns
range from 200-750
750 tpd (average 425 tpd).
DRY PROCESS:
In dry process production, limestone is
crushed to a uniform and usable size, PROCESS WISE CEMENT
blended with certain additives (such as iron PRODUCTION
ore and bauxite) and discharged on to a Semi-Dry
vertical roller mill where the raw materials Wet Process Process
are ground to fine powder. An electrostatic 3.5% 0.2%
precipitator dedusts the raw mill gases aand
collects the raw meal for a series of further
stages of blending. The homogenized raw
meal thus extracted is pumped to the top of
Dry Process
a pre heater by air lift pumps. In the pre 95.3%
heaters the material is heated to 750°C.
Subsequently, the raw meal undergoes a
process of calcinations in a pre calcinator
(in which the carbonates present are
reduced fed to the kiln. The remaining
calcination and clinkerization reactions are completed in the kiln where the temperature is raised to 1,450-
1,450
1,500°C. The clinker formed is cooled and conveyed to the clinker silo from where it is extracted and
transported to the cement mills for producing cement. For producing OPC, clinker and gypsum are used
and for producing PPC, clinker, gypsum and fly ash are used.

WET PROCESS:
The wet process differs mainly in the preparation of raw meal where water is added to raw materials to
produce slurry. The chemical composition is corrected and the slurry is then pumped to the kiln where
evaporation of moisture, preheating, calcinations and ssintering
intering reaction takes place. The clinker is cooled
and transported, as in the case of other plants, with suitable conveyors to cement mills for grinding. The
wet process is more energy intensive, and thus becomes expensive when power and energy prices are ar
high.

The cement companies that still use wet process can increase their efficiencies and lower their
operating cost significantly by opting for dry process.
GLOBAL CEMENT OVERVIEW:

source: U.S. Geological Survey, Mineral Commodity Summaries, January 2010

The Global Cement market is largely dominated by China. China accounts for nearly 50% of world
cement production. India comes second with a share of 6% and then USA with a share of 3%

Global demand for cement is forecast to grow 4.7 percent annually through 2010 to 2800 MMT, valued at
over $200 billion. China, which is already by far the largest market for cement in the world, will register
the biggest increases. Product demand in China is projected to expand more than the total amount of
cement currently used annually in the next two largest markets -- India and the US -- combined.

Other developing parts of Asia and Eastern Europe, as well as a number of nations in the Africa/Mideast
and Latin America regions, will also record above average cement market gains, fueled by a robust
construction outlook. Product demand in India, for example, will climb at a healthy 6.4 percent annual rate
on account of increased infrastructure spending by the Government. Vietnam, Thailand, Turkey and
Indonesia will register some of the strongest increases in percentage terms. Market advances will be less
robust in the developed areas of the US, Japan and Western Europe, with maintenance and repair
construction accounting for much of the growth in cement demand through 2010. However, a pickup in
construction activity in Germany and Japan following an extended period of decline will help bolster
overall developed world market gains.
Demand for straight Portland cement, which currently accounts for more than three-quarters of all cement
sales worldwide, will be healthy, spurred by increases in global construction spending and further
advances in manufacturing technology. Sales of blended cements will climb at a somewhat faster pace
through 2010, driven by their superior performance in selected applications. Demand for non-blended
pozzolanic cements, masonry cement and other types will record the strongest gains.

Ready-mix concrete is expected to be the fastest growing market through 2010, surpassing consumer sales
to become the largest single cement market. Ready-mix concrete companies account for a comparatively
small but rising share of total cement demand in a number of fast-growing developing countries, and
suppliers will benefit from an extremely favorable outlook in China, where large-scale construction
projects will require significant amounts of ready-mix concrete. Consumer demand for cement will also
expand at an above-average rate, stimulated by higher personal income levels in developing areas, where
consumer sales can account for half or more of all cement demand, and by new product introductions in
mature developed world markets.

WORLD CEMENT DEMAND

(million metric tons)
% Growth over 5 years
Item 2000 2005 2010 2000-2005 2005-2010
Cement Demand 1630.0 2250.0 2830.0 36 25
North America 149.6 170.0 196.0 12 13
Western Europe 197.7 208.5 233.0 5 11
Asia/Pacific 954.5 1470.0 1895.0 54 20
Other Regions 328.2 401.5 506.0 22 26

The world cement demand will be led by emerging markets like Brazil, India, China, Russia. China and
India are the top two countries producing cement. Traditionally the demand of cement is linked to the
GDP growth, higher the GDP growth, higher is the demand for cement. Also the demand is driven by
the infrastructure spending by the government.

The volume of cement entering world trade has traditionally been low relative to overall production and
consumption - typically accounting for approximately 6-7% in aggregate terms. This is linked to the low
unit value of cement, the widespread availability of raw materials, and the link between economic growth
and cement consumption - all these factors favoring domestic production rather than import dependence.
The development of future cement trade volumes will continue to be dominated by essentially short-term
import requirements, set against an underlying background of clinker import dependency and other long-
term supply patterns. Trade volumes will remain highly susceptible to cost and availability factors, with
any major shift in shipping costs being of potential primary significance in this regard.
INDIAN CEMENT INDUSTRY
INDUSTRY:

The cement industry in India dates back to 1914, with the setting up of its first unit in Porbunder. It is
considered as one of the core infrastructure industries. IIndia is the second largest producer of cement in
the world just behind China, with industry capacity of over 245 Million Metric Tonnes(MMT) in the year
2009-10. It is consented to be a core sector aaccounting for approximately 1-3% of GDP and employing
over 0.14 million people. Also the industry is a significant contributor to the revenue collected by both the
central and state governments through
ough excise and sales taxes.
The growth rate of cement was on an average 9% to 10% during the period from 2006-10. 2006 Even though
the Indian Cement industry has been growing at 9% to 10% for the last five years, it has tremendous scope
for growth in the long term because the per capita consumption is around 134 kgs as compared to the
world average of over 263 kgs. Demand for cement in India is expected to continue its buoyant ride on the
back of robust economic growth and infrastructure development in the coun country.
Cement, being a bulk commodity, is a freight intensive industry and transporting cement over long
distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the
industry divided into five main regions viz. nnorth,
orth, south, west, east and the central region. While the
southern region always had excess capacity
in the past owing to abundant availability of
REGION WISE limestone, the western and northern regions
CAPACITY(2008
CAPACITY(2008-09) are the most lucrative markets on account of
higher income levels.. However, with capacity
addition taking place at a slower rate as
compared to growth in demand, recently the
13%
demand supply parity had also been restored
EAST to some extent in the Southern region.
36% 14%
WEST Considering the pace at which infrastructural
activity is taking
g place in different regions,
NORTH the players have lined up expansion plans
15%
SOUTH accordingly.
22% CENTRAL
The region wise distribution of capacity
indicates a higher capacity build up in the
southern region. This is due to the available
reserves of limestone which is a principle
prin
raw material in cement production. Due to
such huge capacity in the southern region
REGION WISE CEMENT the prices of cement are lower than that of
rest of India.
CONSUMPTION(2008
CONSUMPTION(2008-09) The western region which constitutes only
two states Maharashtra and Gujrat consume
20% of the total cement production. This is
15% on account of rapid economic development
16% EAST of these regions.
WEST
31%
20% NORTH
SOUTH
18%
CENTRAL
 40

35
MILLION METRIC TONNES

30

25 21.88

20 17.96 17.86
15.88
15 12.09 11.65
10.98 Cement Production
10 8.38 7.65 7.89 Capacity
7.27
5.47 6.25 5.1
4.16 Cement Consumption
5 3.11 2.43
1.93 1.081.68
0
0

Haryana
Rajasthan

Jharkhand
Punjab
Gujarat
Maharashtra
Karnataka

Bihar
Uttar Pradesh

Orissa

Meghalaya

Kerala
Andhra Pradesh
Madhya Pradesh
Tamil Nadu

Chhattisgrah

Assam
West Bengal

Jammu & Kashmir

Himachal Pradesh

Uttarkhand

CEMENT PRODUCING STATES

Out of the total states in India only 21 states have cement plants. Out of these only 17 states have an
installed capacity of more than 1 MMT
MMT. The states like Uttarkhand and Haryanaa have started producing
cement only after 2006-07. In most of the states the supply is more than the demand. However, in states
like Maharashtra, Uttar Pradesh, West Bengal, Haryana, Kerala, Bihar, Jammu& Kashmir,
Kashmir Assam the
demand is more than the supply. These are very lucrative markets for the cement companies. However the
companies who have pan India presence will only be able to tap these diverse markets profitably.
CEMENT-INPUTS:
Limestone
It is the main raw material required for
Other LIMESTONE PRODUCING
production of cement. About 1.5 tonnes of
States
limestone is used in the manufacture of 1 tonne 12%
STATES
of cement. Cement grade limestone is located Andhra
Karnataka
only in certain areas in the country leading to Pradesh
8%
22%
establishment of cement plants in clusters. Chhattisgarh
Limestone
mestone is available in large quantities in 8%
Rajasthan
Rajasthan, Madhya Pradesh, Gujarat, Andhra 18%
Pradesh, Karnataka, Tamil Nadu, and a part of
Bihar.This has created pockets of cement Tamil
production called clusters. Nadu Gujarat
The skewed distribution of capacities coupled 8% 11% Madhya
Pradesh
with transportation
ansportation bottlenecks has created
13%
pockets of surplus and deficit in the country.
This has led to pricing differentials across markets. Since limestone is required in such high quantities any
fluctuation in prices of limestone would affect the bottom lin linee of companies. Hence most of the major
cement companies have their own limestone mines. Some of the companies having limestone mines are
Grasim Industries Ltd., The Associated Cement Cos. Ltd., Ultra Tech Cement Ltd.,, India Cement Ltd., Lt
Shree Cement Ltd., Birla Corporation Ltd., Madras Cement Ltd. and Binani.

Coal
Around 25 tonnes of coal are used to make 100
tonnes of cement. Coal al forms about 20% of the
total operating cost. The industry uses about
INTERNATIONAL PRICES
5% of coal produced in the country.. Private OF COAL
ownership of coal mines was not permitted in 120
India and all purchases had to be made from 100
USD $

government-owned
owned coal mines. The 80
government and Cement Manufacturers 60
Association (CMA) make allocation of coal. 40
The quantities were fixed after making Price
20
assessments of likely production
uction and also based 0
on past performance of the unit concerned.
Nov
Aug

Dec
Apr

Jul

Mar
Oct
May
Jun

Sep

Jan
Feb

Units at a greater distance used to suffer

because of high transport costs and (in case of MONTHLY PRICES 2009-10 2009
some units) delays in receiving coal because of
additional transshipment time (loss in transferring coal from broad gauge to meter gauge wagons).
However, the scenario has changed somewhat. The government has allowed captive coal mining. The
larger cement companies have taken advantage of this and got mining licenses. This has protected them
from fluctuations
ations in coal prices and uncertainty in allocation of coal.
The union budget 2010-11 has levied cleanlean energy cess on coal produced in India at a nominal rate of Rs
50 per tonne. This cess will also apply on imported coal. The XIth plan project (2011
(2011-12)
12) had estimated
coal demand from cement (excluding co coal requirement of captive power plants) to be 31.9
31 million tonne.
So, the Rs 50 per tonne levy of clean energy cess means additional cost of Rs 159.50 crore for the coal
sector. The actual impact could be higher considering the fact that most of the cement plants have captive
thermal power plants, which also require use of coal.
The prices of international coal are expected to continue their upward journey. Also since the prices of
coal depend on the availability
lability of shipping recourses, non availability of ships can push the coal prices
up. The index to watch out for is the Baltic Dry Index. As a result of increase in price of international
coal as well as the clean energy cess imposed the cement companies would be seeing their margins
coming under pressure.

Power
Cement industry is very power intensive and about 120 kwh kwh(kilo watt hour) of power is required to
produce one tonne of cement. The consumption is lower at around 90 90-100
100 kwh in new and more efficient
units. Availability of stable and continuous power supply is of critical importance to the cement industry.
Factories, particularlyy those in the South, have been experiencing erratic power supply. Also power costs
are high in India and growing at 10% annually. The industry is trying to insulate itself against this by
setting up captive thermal power plants while diesel generator sets are being used as a standby
arrangement.
Most of the cement companies have invested heavily in setting up captive power plants. Setting these
plants creates a win-win
win situation for the companies. The companies not only are assured of
continuous and uninterrupted
terrupted power supply but also are insulated from the price hike by the state
electricity boards. The thermal
power plants generate fly ash
which is used in manufacturing WPI of cement v/s WPI of inputs
of cement. 350
Wholesale price Index(WPI)

300
Transportation
Cement is highly freight intensive 250
in nature. Every tonne of cement 200
manufactured involves the Cement

transportation of 1.6 tonnes of 150 Coaking Coal

limestone, 0.25 tonnes of coal, 100 Lime Stone
0.05 tonnes of gypsum and 1 Gypsum
tonne of the finished product. The 50
industry faces serious 0
transportation constraints in terms Jan Mar May Jul Sep Nov Jan Mar May
of timely availability of rail
wagons. This has forced Months from Jan 09-May 10
manufacturers to move
progressively larger quantities by road. In spite of serious shortage of wagons, the planned expenditure on
this has been
en slashed by more than 40% under resource constraints. The outlay has also been reduced on
gauge conversion - thus limiting carrying capacity and turnaround time of wagons.
To overcome its resource crunch, the Railways is relying on 'Own your Wagon' (OYW)(OYW and 'build operate
lease transfer' (BOLT) schemes. It is clear that the companies that have procured own wagons and leased
the same to the railways will be given priority in allotment of wagons. Companies like Grasim and ACC
have already invested in the OYW scheme.
Gujarat Ambuja pioneered the concept of transportation by sea. It has taken the advantage of its coast
location and has constructed its own jetties at Kodinar, Surat and New Bombay and has insulated itself
from otherwise poor port facilities. It uses these facilities and its own ships to move cement to markets in
Gujarat and Mumbai. It enjoys a significant cost advantage by using this route.
Thus it can be seen that the cement companies which are able to create their own infrastructure are able to
insulate themselves from the uncertainties of the supplies from the government. Thus the company would
gain competitive advantage over others thereby enjoying higher profit margins.
IMPACT OF UNION BUDGET 2010-11 ON CEMENT INDUSTRY:

Clean energy cess on coal produced in India at a nominal rate of Rs 50 per tonne to be levied.
This cess will also apply on imported coal. The XIth plan project (2011-12) had estimated coal
demand from cement (excluding coal requirement of captive power plants) to be 31.9 million
tonne. So, the Rs 50 per tonne levy of clean energy cess means additional cost of Rs 159.50
crore for the coal sector. The actual impact could be higher considering the fact that most of
the cement plants have captive thermal power plants, which also require use of coal.

Rs. 66100 crore provided for Rural Development.

An amount of Rs 48,000 crore allocated for rural infrastructure programmes under Bharat
Nirman.

Unit cost under Indira Awas Yojana increased to Rs 45,000 in the plain areas and to Rs 48,500
in the hilly areas. Allocation for this scheme increased to Rs 10000 crore.

Allocation for urban development increased by more than 75% from Rs.3,060 crore to
Rs.5,400 crore in 2010-11.

Allocation for Housing and Urban Poverty Alleviation rose from Rs 850 crore to Rs 1000 crore
in 2010-11.

Scheme of one per cent interest subvention on housing loan upto Rs10 lakh, where the cost of
the house does not exceed Rs 20 lakh — announced in the last Budget — extended up to
March 31, 2011.

Rs 1270 crore allocated for Rajiv Awas Yojana as compared to Rs 150 crore last year.

Standard excise rate up from 8% to 10%

The clean energy cess of Rs.50/tonne of coal would mean the energy cost would go up. The cement
companies not only require coal for firing up their Kilns but also they require it in their captive power
plants for generating electricity. This would surely increase their cost.
E.g for producing 100 tonnes of cement we require 25 tonnes of coal. Now, for a 1 MMT plant the coal
required would be 40000 tonnes which would cost additional 250000*50=12500000 i.e 12.5million
rupees.
The increase in allocation for infrastructure programmes would increase the demand for cement.
Moreover the increased spending for rural development will help the cement companies tap in the rural
markets.
Increase in excise duty would result in cement companies trying to pass the cost to the consumers.