THE focus on infrastructure, especially highways with enhanced dedicated funding through a higher cess on petrol and diesel, rural housing and the continuation of the tax incentives on housing loans are likely to keep cement demand ticking at a healthy rate.

The reduction in depreciation rates for income-tax purposes could act as a drag on earnings, especially for companies that are in an investment mode.

The likes of Shree Cement, Madras Cement, Gujarat Ambuja Cement and Grasim may find a percentage point or two knocked off in the near term; but they are likely beneficiaries from the reduction in tax rates over the longer term.

The hike in excise duty on clinker is not likely to be a significant factor as it would set off as a modvat credit.

S. Vaidya Nathan

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