The stimulus package driven boost to infrastructure has caused a demand pick-up in the cement sector. However, opinions are divided on whether this demand will sustain or fizzle out before the elections.
The demand has been boosted by state government project restarts including (a) the sewerage line project in Punjab; (b) the national irrigation project in Haryana and Andhra Pradesh; (c) roads, bridges and other infrastructure projects in Gujarat; (d) the concretization of roads in Delhi; and (e) the Bangalore Metro in Karnataka. This seems to be pre-poll demand and is likely to sustain till May but what happens after monsoons its big worry.
After the government package came, demand has picked up and except for the pressure on supply, which is should be good for only early of this year. Higher demand doesn't mean end of problems for cement firms. Supply is a greater problem for the industry than demand at the moment.
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