Record cement capacity additions likely to keep utilisation at 70-71 pc: Report
New Delhi, June 19
Capacity utilisation in India's cement industry is expected to remain stable at around 70-71 per cent in FY27, a report said on Friday.
While the cement industry is estimated to have grown around 6.5-7.5 per cent in FY26 and demand is expected to grow around 5 per cent in FY27, the pace of capacity creation is expected to keep utilisation levels broadly stable across the sector, the report from Equirus Securities said.
Higher capacity utilisation is expected in northern and central regions and relatively moderate levels in the south due to capacity overhang.
Industry capacity additions are projected at 42-44 MTPA in FY27, following 50-55 MTPA in FY26.
The report noted that demand remained resilient during the year, driven by robust construction activity, especially post-monsoon in H2FY26, supported by sustained momentum across housing and infrastructure segments.
The sector continues to benefit from rapid urbanisation, increasing housing demand and government-led investments in roads, metro rail projects, industrial corridors, ports and other infrastructure projects.
Leading cement producers are continuing to expand through both organic and inorganic routes as they position themselves for long-term demand growth.
The report suggested that the industry could increasingly move towards a phase where operational efficiency, utilisation improvement and return ratios become key differentiators. As fresh capacities come on stream across the sector, cement companies may focus on sweating existing assets and extracting efficiencies from recently commissioned facilities.
Long-term growth prospects for the cement sector remain favourable due to rising infrastructure spending, affordable housing initiatives, manufacturing investments, Smart Cities projects and the National Infrastructure Pipeline.
India's per-capita cement consumption remains significantly below the global average, providing further room for long-term growth.
With industry capacity additions likely to remain elevated over the near term, utilisation levels broadly stable, the operational efficiency and asset productivity becomes increasingly important across the sector, the report noted.
— IANS
Reader Comments
Thank God for all these road and metro projects! My father worked in cement industry for 30 years, he says this is the best time since 2000s boom. But 42-44 MTPA additions? That's massive. Companies better have demand lined up or else...
Interesting data, but I wonder how much of this demand is sustainable. Affordable housing schemes are great, but if input costs keep rising, margins will squeeze. The focus on operational efficiency makes sense - sweating assets is the way to go.
Per capita consumption still low = massive opportunity! 🔥 But I'm worried about environmental impact. Cement plants are huge polluters. Hope these new capacities have better emission controls. Green cement should be the focus going forward.
My uncle owns a small cement dealership in UP. He says post-monsoon demand is really picking up in tier-2 cities. Smart Cities mission is actually working on ground! Hope utilisation improves beyond 70% though, that's barely breaking even for many plants.
The north-south utilisation disparity is concerning. Southern states have too much capacity while north is booming. Maybe they should consider moving some capacity or focus more on exports from southern ports? The industry needs better regional planning.
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