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India's cement industry is expected to continue its mid single-digit growth trajectory over the next two financial years, supported by sustained demand from housing and infrastructure projects, according to an assessment by a leading rating agency. Industry volumes are projected to grow in the range of 6-7% in FY27, following stronger growth in the current fiscal. Capacity expansion plans remain robust, with significant additions anticipated across FY26 and FY27. Improved pricing, higher utilisation levels, and supportive policy measures such as lower GST rates and increased public infrastructure spending are likely to underpin profitability and demand, keeping the sector on a stable growth path.
India's cement industry is likely to sustain steady growth in the coming years, aided by healthy demand from housing and infrastructure development, along with favourable policy support. The sector is expected to register growth of around 6-7% in FY27, while growth in the current fiscal FY26 is projected at 6.5-7.5%. Advertisement
Cement demand has remained strong, with volumes expanding by about 8.5% in FY26, driven by robust construction activity. With post-monsoon construction expected to accelerate, demand is likely to see a sequential improvement in the second half of FY26.
The industry is also witnessing significant capacity expansion. Total capacity additions of around 85-90 million tonnes per annum (MTPA) are expected during FY26-FY27. Specifically, capacity addition is projected at 43-45 MTPA in FY26, followed by 42-44 MTPA in FY27, as leading players expand through both organic and inorganic routes.
Operational profitability is also expected to improve, with EBITDA estimated at INR 880-930 per metric tonne in FY27, supported by better pricing and higher sales volumes. Policy measures such as the reduction in GST on cement from 28% to 18%, along with increased government expenditure on infrastructure, are expected to further strengthen demand momentum through FY26 and FY27.
Regionally, north and central India are likely to witness higher capacity utilisation compared to the national average, while the southern region may continue to see relatively moderate utilisation due to capacity overhang. Overall, industry capacity utilisation is projected to remain stable at around 70-71% in FY27, similar to FY26, despite the expanded capacity base.
India currently has an installed cement capacity of about 700 MTPA, making it the second-largest cement producer globally after China.
Source - PTI
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