Steel, cement, aluminum, fertilisers, tractors, two-wheelers, beverages and carbonated drinks, tyres and FMCG could see demand back to near normal levels by the third or the fourth quarter of the financial year, or even earlier.
When will demand for companies reach last year’s or pre-Covid19 levels?
For many sectors, it is too early to predict but in steel, cement, aluminum, fertilisers, tractors, two-wheelers, beverages and carbonated drinks, tyres and FMCG, demand could be back to near normal levels by the third or the fourth quarter of the financial year, or even earlier.
For some, this revival could be across all segments of their businesses.
For others, it will be only in some segments such as tyres, which is seeing some uptake but only in replacement.
Demand for replacement tyres from tractors, commercial vehicles, and two-wheelers is up, said Arnab Banerji, chief operating officer, Ceat, for which 60 per cent of its business comes from the replacement market.
“Even the passenger car segment picked up at the end of May and we expect it to improve in June.
“By July, we expect to be at 80-120 per cent of last year’s demand for replacement tyres.”
He expects good figures from two-wheelers, given that Honda sold over 115,000 units in May.
Yadvinder Singh Guleria, director (sales and marketing), Honda, said a company survey showed that 80 per cent of respondents planned to buy a two-wheeler within three months of the lockdown lifting, partly because of the desire to avoid public transport.
However, tyre makers heavily dependent on the original equipment manufacturers’ OEMs’) market for passenger cars are not so happy because the OEM market is completely dependent on how vehicle manufacturers roll out.
Many sectors linked to infrastructure could see normalisation of demand faster.
In aluminium, orders are coming from fabricators, MSMEs (they expect a big boost after government financial support), the railways (government orders), pipe manufacturers and a little from the auto sector too.
Vijay Sharma, director, Jindal Stainless, said: “In June, we expect sales to be 50-60 per cent of the normal. In July, it should be 70 per cent. We also see new opportunities in exports, especially in markets from where China withdraws due to the backlash.”
Tata Steel Managing Director and Chief Executive Officer T V Narendran projects that its domestic steel demand will reach pre-pandemic sales levels probably by Q3 or Q4.