Exhibit 2: Monthly Cement Dispatches mn tonnes
%
20 18 16 14 12 10 8 6 4 2 0
16 14 12 10 8 6 4 2 0 Jan-08 Jan-09
Mar-08 Mar-09
May-08
Jul-08
Sep-08
Cement Dispatches
Source: CMA, Angel Research
Nov-08
yoy growth (RHS)
•The average cement prices across the major cities of India witnessed a recovery in the last couple of months after having declined during October-December 2008. In the mentioned period, average cement prices moved up by Rs8-10/bag. in FY2009, all india average cement prices have increased by 5.4% to Rs249/bag from Rs236/bag in FY2008. Among major cities, in FY2009, Chennai witnessed the maximum price rise of around 8.2%, while prices in Mumbai grew 5.3%. However, in Delhi the prices were up marginally by 2%.
Smooth road this far, bumpy ride ahead In FY2009,cement consumption grew by 8.6%, due to strong demand post November 2008 •The Cement Industry witnessed a strong FY2009, with the cement manufactures' posting robust dispatch growth of 8.1% yoy largely aided by the surge in demand since November 2008 due to the pre-Election spending on infrastructure and rural projects. •However, the consumption growth of 8.6% is lower than the growth of around 10% clocked in the last three years
•The Housing Sector, which accounts for 60-65% of cement consumption, is facing severe downturn due to the slowdown in demand on account of the high Interest rates, Credit crunch and high Real Estate prices. Going ahead into FY2010, we expect the Housing Sector to remain under pressure resulting in lower demand for cement. Demand for cement is expected to slow down to 7% during FY2010E.