Will Cement Volumes in India Grow by 6-7% in FY27?
Click to start listening
Synopsis
India's cement industry is set to achieve a remarkable growth of 6-7% in FY27, driven by the housing and infrastructure sectors. This anticipated expansion follows a robust performance in FY26, showcasing the sector's resilience and potential for further growth. Discover how government initiatives and market dynamics are shaping this vital industry.
Key Takeaways
- The Indian cement industry is poised for a 6-7% growth in FY27.
- Ongoing demand from housing and infrastructure sectors remains strong.
- Capacity additions are expected to reach 42-44 million MTPA.
- Average cement prices are likely to increase by 2-4%.
- The outlook for the domestic cement sector remains Stable.
New Delhi, Dec 30 (NationPress) The cement sector in India is anticipated to experience a growth of 6-7 percent in volume for FY27, driven by ongoing demand from the housing and infrastructure industries. This follows a growth forecast of 6.5-7.5 percent for FY26, based on a higher benchmark from the second half of FY25, according to a report released on Tuesday.
The industry is expected to augment its capacity by 42-44 million MTPA in FY27, following a 43-45 million MTPA increase in FY26.
ICRA, a rating agency, noted that cement demand is robust, with volumes increasing by 8.5 percent during the first eight months of FY26, bolstered by vigorous construction activities.
With the construction sector anticipated to gain momentum post-monsoon, a sequential rise in demand is expected in the second half of FY26.
Moreover, a reduction in GST on cement and the Government's persistent focus on infrastructure investments are likely to enhance demand trends through FY26 and FY27.
In light of the positive demand outlook, leading cement firms are expanding their production capacities through both organic and inorganic means to further solidify their market presence.
“Profitability in FY26 is expected to significantly improve, with OPBITDA per metric ton projected to rise to Rs 900–950 from Rs 810 in FY25, aided by improved pricing and increased volumes,” stated Anupama Reddy, Vice President and Co-Group Head of Corporate Ratings at ICRA.
As FY27 approaches, the industry is set for steady growth of 6–7 percent, supported by ongoing demand from the housing and infrastructure domains,” she added. Some regions, particularly in northern and central India, are likely to see higher capacity utilization than the national average of approximately 70 percent, while the southern regions may face moderate utilization levels due to existing capacity challenges.
ICRA foresees an average cement price increase of 2-4 percent in FY27, following a 3-5 percent rise in FY26, driven by strong demand.
The rating agency has a ‘Stable’ outlook for the domestic cement sector.
Point of View
It is crucial for us at NationPress to remain attuned to the developments in the cement industry. The projected growth of 6-7% for FY27 highlights the resilience of this sector in the face of economic challenges. The sustained demand from housing and infrastructure, coupled with government support, reinforces the importance of monitoring this industry closely.
NationPress
08/01/2026
Frequently Asked Questions
What is the projected growth rate for India's cement industry in FY27?
The cement industry in India is projected to grow by 6-7% in FY27.
What factors are driving the growth in cement demand?
The sustained demand from the housing and infrastructure sectors, along with government initiatives in infrastructure spending, are key drivers.
How much capacity is expected to be added in FY27?
The industry is expected to add 42-44 million MTPA of capacity in FY27.
What is the outlook for cement prices in FY27?
Cement prices are expected to rise by 2-4% on average in FY27.
How did the cement industry's performance in FY26 influence the projections for FY27?
The cement industry recorded a growth of 6.5-7.5% in FY26, which has set a higher benchmark for FY27 projections.
