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Among large players, planned expansions include Tata Steel’s Kalinganagar plant by 5 MTPA as well as JSW
Steel’s Dolvi plant expansion of 5.7 MTPA along with Vijayanagar plant expansion of 6 MTPA by fiscal 2025.
Also, while the NMDC greenfield project at Nagarnar, Chhattisgarh has been facing delays on account of issue
with regard to statutory clearances, controversy on right use of water pipeline, skilled manpower availability, and
delay in a package due to non-completion of other linked activities. It is expected to come on-stream by in 2022.

Vedanta is expected to add 1 million tonne of steel capacity at Electrosteel Steels by fiscal 2023, as well. However,
there has been a delay in capex due to Covid-19. Further, several global steelmakers have been working with
PSUs and domestic private players to set up joint ventures. Additionally, land parcels have been allocated to JSW
for setting up a 12 MTPA steel plant. However, the project is in the planning stage and has not achieved significant
progress.

The mentioned capacity additions exclude SAIL’s RSP expansion of 6.8 MTPA, Kadapa Steel expansion,
Electrosteel Steels plan of expanding to 7 MTPA (only 2.5 MTPA considered above), and Am/NS addition of 2-
5 MTPA as these proposals are still in the planning stage.

Material handling equipment demand to stay near static till fiscal 2023

Demand for material handling equipment (MHE) is derived from capacity addition in key end-user segments,
including automobiles, cement, mining (coal), oil and gas, petrochemicals, ports, power generation (coal), steel
and warehousing, which comprise ~90% share.

MHE demand is estimated to remain range bound during fiscals 2020 to 2023, at Rs 1,100-1,150 billion, vis-a-vis
Rs 1,145 billion between fiscals 2016 and 2019. Among the major contributors to MHE demand, demand is
projected to slow down from the power generation, automobile and steel industries. In turn, capacity additions
and investments in the MHE space are expected to slow down. A further weakening will be truncated by
accelerating demand from the oil and gas, warehousing and cement industries.

Cement sector growth

Infra investments and affordable & rural housing to drive cement demand till fiscal 2023

Cement demand to GDP multiple dropped to (0.5) in fiscal 2020 and slipped into negative territories for the first
time because of demand falling 2% on-year coupled with the economic slowdown in fiscal 2020 with GDP growth
pegged at ~4.2%. In fiscal 2021 as well, the cement-to-GDP multiplier is expected to deteriorate to (2-4) on back
of pandemic-led demand slump, which is the lowest level in the last two decades. CRISIL sees India’s GDP
contracting 5% in fiscal 2021 due to the extended restrictions and lockdown, especially in states where Covid-19
cases are still rising; a normal monsoon that supports the kharif crop and agriculture incomes; softer crude oil
prices; and limited fiscal support to prop up an immediate growth revival. Overall, risks remain tilted to the
downside and will hinge on further extension in containment measures, slipping of economic growth and a sub-

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