There are signs of a pick-up in economic activity with steel and cement demand registering strong growth on increased government spending on rail, road and port projects.
The pick up helped Tata Steel and Essar Steel report strong growth in sales during the first quarter of this year. The other large steel companies such as JSW Steel and SAIL are also expected to log in good growth in demand, said an analyst. The government has set an ambitious target to construct 15,000 km of national highways with investment of Rs. 1.5 lakh crore this fiscal. Binod Modi, Research Analyst, Reliance Securities, said the up tick in cement sales and incremental demand from proposed smart city projects and housing for all schemes bodes well for cement companies which have slowed down their fresh capacity addition.