26 December 2019 The past few quarters have witnessed weak overall demand in India due to slow construction activity; however, the North and parts of the South (Tamil Nadu) have fared better. While overall demand in the country should be better in FY21 (~6% YoY), the East should see stronger growth (~10% YoY). While capacity addition continues to lag demand and is expected to drive higher utilizations, most additions are those of cement grinding units, which does not necessarily create new supply, and are at times, only for logistical reasons. According to our checks, currently all-India prices are up 5% YoY; led by ~10% growth in the North/Central-India, while the East/South have been nearly flat. The capex for Bara grinding unit and Super Dalla clinker (acquired from Jaypee Associates in CY17) is limited as the capacities are awaiting only final clearances. Net debt of the company is expected to decline led by limited capex spends and stronger cash flows from the ramp-up in existing capacities.