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Key Points

Systematix Research predicts a cement demand increase of 6-7.5% for FY26, driven by recovery in infrastructure and housing. The report indicates that FY25 ended positively, with increased government capital expenditure reviving construction markets. Regional price hikes faced mixed absorption due to factors like early monsoons and heat waves. Despite these challenges, the industry is optimistic, bolstered by improved capacity utilization and a favorable cost environment.

Key Points: Cement Demand to Surge 7.5% with Infrastructure Boost

  • Infrastructure and housing drive demand growth
  • FY25 ends on a strong note with capacity rise
  • Regional price hikes face mixed absorption
2 min read

Cement demand to grow 6-7.5% in FY26 amid recovery in infrastructure and housing: Report

Cement industry demand to grow 6-7.5% in FY26 amid infrastructure recovery, says Systematix Research.

"Consolidation-led discipline and robust infrastructure fuel projected growth. - Systematix Research"

New Delhi, June 3

The Indian cement industry is likely to see a demand growth of 6 to 7.5 per cent in the current financial year (FY26), according to a report by Systematix Research.

The report highlighted that with consolidation-led discipline taking hold and strong momentum in infrastructure and housing sectors, the industry is entering a more stable and profitable phase.

It said, "With consolidation-led discipline settling in and momentum building in infrastructure and housing, industry demand is expected to grow by 6-7.5 per cent in FY26".

The report noted that the sector exited FY25 on a stronger footing. The last quarter of the previous financial year saw a visible recovery in both demand and pricing after a slow first half. Increased government capital expenditure towards the end of FY25 helped revive construction activity in major markets.

The report said "Cement volume for companies under our coverage grew by 11 per cent after a slow H1 due to an upswing in commercial activity and a ramp-up in government execution. In FY25, the cement industry ended with a capacity of about 655 MTPA (+4.8 per cent YoY).

This also supported price hikes, which were partially absorbed in regions like the East and North.

In May 2025, the report added that the cement companies attempted price hikes across different regions, ranging from Rs 5 to Rs 10 per bag.

However, due to weak demand in several areas, the absorption of these hikes remained limited. Regional factors such as early monsoons and heat waves played a key role in affecting demand.

In the East, demand dropped sharply due to early monsoons, but prices still rose by Rs 46 per bag. The South faced flat demand conditions as heat waves impacted construction activities.

As a result, price hikes in the region are expected to be postponed to the second quarter of FY26, since the fourth quarter remained muted.

Meanwhile, the report mentioned that central India recorded a modest hike of Rs 2 per bag, and Northern markets saw better traction, with prices increasing by Rs 20-30 per bag.

Despite these regional challenges, the average cement price across India rose 1.6 per cent month-on-month in May 2025, reaching Rs 367 per bag.

The industry also benefited from a favourable cost environment and improving capacity utilisation, further supporting a positive outlook for FY26.

- ANI

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Reader Comments

R
Rahul K.
Good to see infrastructure sector picking up pace! 🚧 The 6-7.5% growth projection seems realistic given the government's focus on housing and road projects. Hope this translates to more jobs in construction sector too.
P
Priya M.
While growth is positive, I'm concerned about price hikes affecting home buyers. ₹367 per bag is already high for middle class families building homes. Government should monitor this closely.
A
Amit S.
The regional variations are interesting - North doing well while South struggles with heat waves. Shows how climate impacts our economy directly. Maybe cement companies should invest more in weather-resistant construction materials?
S
Sunita R.
As someone from Odisha, the early monsoon impact is very real here. Construction work stops for months during rains. Cement companies should plan better for seasonal demand fluctuations instead of sudden price changes.
V
Vikram J.
The 655 MTPA capacity is impressive! But I hope this growth is sustainable and not creating another boom-bust cycle. Remember what happened in 2010-12 when overcapacity led to price wars.
N
Neha P.
Positive news overall 👍 But wish the report mentioned more about eco-friendly cement alternatives. With climate change, we need greener options even if they cost slightly more.

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