MOSL: CEMENT (GROUND REALITY)-Government’s continued infra/housing push key in AP/Telangana
CEMENT (GROUND REALITY): Government’s continued infra/housing push key in AP/Telangana
We toured Hyderabad to meet some cement players and real estate consultants to understand the demand environment in that market. Key takeaways:
- Demand in AP/Telangana is likely to face election-related headwinds. Election results hold the key, especially as execution of the projects planned by the government will set the demand tone, going forward.
- Pricing in south has been disturbed, as many players are selling cement at discount. Utilization has increased, with some plants operating at ~80-85%.
- Proportion of demand coming from the non-trade segment has increased, driven by various roads, infrastructure and irrigation projects, which has affected payments.
- The 2BHK housing program by the government has not picked up as expected. Fiscal issues are prevalent in both AP/Telangana.
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