Cement -Budget FY12 - A Preview -Anand Rathi Research

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Cement
We do not expect any change in excise duty. The thrust on
infrastructure and affordable housing schemes, along with a likely
increase in the deduction limit for interest on home loans, would be
positive for the cement sector.


Expectations
 We do not expect any change in excise duty.
 Lowering of customs duty on coal, from 5% currently.
 We expect a greater focus on development in infrastructure, through
higher allocation for various schemes. Affordable housing schemes and
investment in roads (especially rural connectivity) are expected to get a
major filip. Measures like easing FDI norms for investment in
affordable housing would stimulate demand.
 Increase in the deduction limit for interest on home loans.
Impact
The excise duty is not likely to change, largely being neutral for the sector.
The sharper focus on infrastructure development and affordable housing
and the increase in deduction limit for home-loan interest would push up
demand for cement.
Companies affected
The thrust on infrastructure, particularly in the housing sector, would be
positive for all the companies. The unchanged rate of excise duty would be
neutral for all the companies. Companies such as India Cements, which
imports a large quantity of coal, would benefit from the reduction/
abolition of import duty on coal.