India’s eastern region is likely to see the highest capacity addition of concrete manufacturing during fiscal years 2019-2021, a Motilal Oswal Securities Ltd analysis showed. The northern market would see the least capacity additions during this period.
“The eastern region is likely to see capacity addition of 26 million tonnes (mt). Of the 26mt, around 6mt is to be added by Dalmia Bharat Ltd by FY21. Shree Cement Ltd’s capacity of 5.5mt in Jharkhand and Odisha is expected to come on stream by FY20 along with Ramco Cement Ltd’s Kolaghat and Jajpur units,” Motilal Oswal Securities said in a report.
Other cement producers such as JK Lakshmi Cement Ltd, Star Cement Ltd, Orient Cement Ltd and Sagar Cements Ltd may also add capacities. Consequently, utilization levels are expected to be in check. Motilal Oswal estimates utilization in this region to decline from 65% in FY18 to 63% in FY21. As such, companies focused on the eastern region would see subdued realization growth in the March quarter earnings.