India's Cement Boom: How Housing and Infrastructure Fuel 6-7% Growth

The industry is expected to add 42-44 million MTPA capacity in FY27, after 43-45 million MTPA capacity addition in FY26.

Rating agency ICRA said that cement demand remains strong, with volumes expanding by 8.5 per cent in the eight months of FY26, aided by robust construction activities.

With post-monsoon construction expected to pick up pace, a sequential improvement in demand is likely to take place in H2 FY26, it added.

Additionally, GST reduction on cement, along with continued focus of the Government on infrastructure spending, is expected to bolster demand momentum through FY26 and FY27.

Amid healthy demand prospects, major cement companies are expanding their capacities, both through the organic and the inorganic routes, to further strengthen their market share.

"In FY26, the profitability is projected to improve significantly, with OPBITDA/MT rising to Rs 900-950/MT from the lows of Rs 810/MT in FY25, aided by better pricing and higher volumes," said Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA.

Entering FY27, the industry is poised for steady growth of 6-7 per cent, underpinned by continued demand from the housing and infrastructure sectors," she said, adding that some regions such as north and central India are likely to witness higher capacity utilisation than the national average of about 70 per cent, while the southern region may continue to witness relatively moderate utilisation due to capacity overhang.

ICRA expects cement prices to rise by 2-4 per cent on an average in FY27, following a 3-5 per cent increase in FY26, supported by strong demand.

The rating agency maintains a 'Stable' outlook for the domestic cement sector.

- IANS