We are on course with our ongoing projects for a capacity enhancement

KRISHNA SRIVASTAVA

Director Marketing, Penna Cement Industries

What is your opinion about the Union Budget 2023-24?

The government has been working on improving and strengthening the country infrastructure. The Union Budget of FY 2023-24 also delivered on similar footprints with the highest capital spending of well over Rs 13.7 lakh cr. for Railways, port and airport developments, road projects and various housing projects. Also, they have been working towards sustainability, digitizing, and modernizing systems and procedures for helping to cope with the ongoing economic growth and further support entrepreneurs. A pending matter of Direct Tax has been taken up which would help and revise the tax slabs on grounds with the new tax regimes.

How far will the Budget help in pushing the further growth of your business segment?

With the Centre's key objective towards the capital spent for putting India on the ongoing fast growth, we expect that the budget would help us provide the necessary support to increase the overall industry's capacity utilization. We have observed a cement demand growth of 8-9% in this FY, which has been very robust due to these heavy infra spends. Even for the next FY 2023-24, the Union Budget helps increase the overall allotment of Rs 6.71 lakh cr. to the Ministry of Road Transport & Highways, Ministry of Railways, and Ministry of Rural Development, which will increase the overall demand for the cement segment. Apart from this, there has been concentration on tier 2 and tier 3 cities on infrastructure development.

Implementation of the Budget proposals is key. What are your views in this direction?

Any perception is set based on the historical pattern which has been observed. With the implementation of such vast capital expenditure, we see a confident robust plan set and the allocation are being done well in advance for the same.

What kind of push in project execution are you expecting this year considering the general elections in the following year?

In our view, the current government has always been very proactive and committed towards long-term growth. We expect this push to continue. India has been on the top of the growth trajectory in recent years; we anticipate economic growth at 7% for the next FY 2023-24.

How are you planning your investment & expansion plans in the year 2023-24?

As per our prior commitment, we are on course with our ongoing projects for a capacity enhancement from 10 million MTs to 16 million MTs by March 2024. With this, we could be a pan-India player, having our presence in well over 18 states. An extensive capex plan of well over Rs 2,500 cr. has been planned and is getting allocated wherever and whenever it is required.

What kind of growth are you expecting in the year 2023-24? What is your outlook?      

With the major cement players going for an extensive capacity increase across India, the demand for the overall industry will remain robust. Demand is mainly due to ongoing private projects (builders, contractors, RMC, and so on) along with adequate spending in the infrastructure projects and across state housing schemes. Currently, the cement capacity in India is well over 590 million MTs, with an estimated production of 298 million MTs in FY 22-23. With the new capacity being added, the capacity would be increased by about 80 million MTs by FY 2024 and an increase of 12% in demand (8% on 5-year CAGR) on a YoY basis, as per IBEF data.

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