In the spotlight: Cement stocks
The Indian cement sector has been growing steadily over the past few years and is expected to continue its growth trajectory in the foreseeable future.
The Indian government's flagship programs such as Smart Cities Mission, Bharatmala Pariyojana, Sagarmala and AMRUT, among others, have led to a surge in demand for cement in the country. As per the Union Budget 2022-23, a higher allocation for infrastructure– USD 26.74 billion in roads and USD 18.84 billion in railways is likely to boost demand for cement.
Cement production in India increased by 12.1% in September 2022 compared to September 2021. In October 2022, UltraTech announced that it has been granted Environmental Product Declaration (EPD) certificates for four of its cement products. In May 2022, Adani Group acquired a 63.1% stake in Ambuja Cements Ltd along with related assets. Ambuja's local subsidiaries include ACC Ltd, which is also publicly traded.
Dalmia Cement plans to spend USD 1.35 billion to increase its installed cement capacity by 52% to 50MT/yr from 33MT/yr before FY2024. JK Cement Ltd signed a long-term strategic (MoU) with Punjab Renewable Energy Systems Private Limited. The MoU is part of JK Cement’s attempts to decarbonize its operations and significantly scale up the use of biomass-based and alternate fuels as replacements to fossil fuels, like coal, in its manufacturing operations.
Adoption of green technologies
Furthermore, the government's push towards the adoption of green technologies in the cement sector is expected to provide a significant boost to the industry. The government has set an ambitious target of achieving 100% waste heat recovery and using 30% of blended cement by 2020. This move is expected to reduce the sector's carbon footprint and make it more sustainable.
Following are the companies with the highest net profit for FY22:
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