Shree Cement Ltd. expects higher government expenditure to spur demand in the third and fourth quarter of 2019-20.
“A good monsoon coupled with government spending will put more money in the hands of rural India,” Shree Cement's Managing Director HM Bangur told Bloomberg Quint. If the government's promise to invest Rs 100 lakh crore in infrastructure comes into play in the market, it will be a positive sign, Bangur said.
Bangur is not the only one expecting an uptick in cement demand.
Sanjay Ladiwala, a member of Cement Stockists & Dealers Association of Bombay, also expects a pickup in cement demand after the monsoon. With the push that the government is giving to the housing segment, there will be an increase in infrastructure spending, he said.
Still, Shree Cement expects its margin to be a “little bit lower” than the previous quarter. “This April-June margin will definitely not be maintained,” Bangur said. “Overall result will be very positive and after six months we will push our prices further.”
In the June quarter of FY20, the company's margin rose 11 percentage points year-on-year to 29.7 percent, according to data compiled by Bloomberg.
Watch the full interaction with HM Bangur and Sanjay Ladiwala here:
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