Cement Volumes in India Seen Growing 6–7 Per Cent in FY27: Report

New Delhi: India’s cement industry is expected to witness volume growth of 6–7 per cent in FY27, driven by sustained demand from the housing and infrastructure sectors, according to a report released on Tuesday. This follows an estimated growth of 6.5–7.5 per cent in FY26, achieved on a higher base in the second half of FY25.

The sector is projected to add around 42–44 million tonnes per annum (MTPA) of new capacity in FY27, after adding approximately 43–45 MTPA in FY26, reflecting continued expansion by major players.

According to rating agency ICRA, cement demand remains robust, with volumes rising by 8.5 per cent during the first eight months of FY26, supported by strong construction activity across regions. The agency expects demand to improve sequentially in the second half of FY26 as construction activity gains momentum in the post-monsoon period.

ICRA also noted that a potential reduction in GST on cement, along with the government’s continued emphasis on infrastructure spending, is likely to support demand growth through FY26 and FY27.

Encouraged by healthy demand prospects, leading cement manufacturers are expanding capacity through both organic additions and inorganic acquisitions to strengthen their market positions.

“In FY26, profitability is expected to improve significantly, with operating profit per tonne (OPBITDA/MT) projected to rise to Rs 900–950 from the lows of around Rs 810 per tonne in FY25, supported by better pricing and higher volumes,” said Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA.

Looking ahead to FY27, she added that the industry is well positioned for steady growth of 6–7 per cent, backed by continued demand from housing and infrastructure. Regional variations are likely, with north and central India expected to see higher capacity utilisation than the national average of about 70 per cent, while the southern region may continue to experience relatively moderate utilisation due to excess capacity.

ICRA further expects cement prices to increase by an average of 2–4 per cent in FY27, following a 3–5 per cent rise in FY26, supported by strong demand conditions. The rating agency has maintained a ‘Stable’ outlook for the domestic cement sector.

With inputs from IANS