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ICRA expects India’s cement industry to grow by 6-7% in next fiscal year
Dec-31-2025

Rating agency ICRA in its latest report has said that the Indian cement industry is expected to maintain mid single-digit growth in the next fiscal year (FY27), helped by the factors including steady demand from housing and infrastructure projects. ICRA said that it expects India's cement industry will grow about 6 to 7 per cent in FY27, and touch 6.5 to 7.5 per cent growth in the current fiscal year (FY26).

It also expects the industry to add 85-90 million MTPA of capacity during FY26-FY27, while operational EBITDA is estimated to be at Rs 880-930 per Metric Tonnes (MT) in FY27, supported by better pricing and higher volumes. Moreover, it said cement demand remained strong, with volumes expanding by 8.5 per cent in FY26, supported by robust construction activity. With post-monsoon construction expected to pick up pace, a sequential improvement in demand is likely to take place in H2FY26.

Further, it stated that GST reforms that reduced the tax on finished cement from 28% to 18%, along with increased spendings by the government on infrastructure, are expected to strengthen demand momentum through FY26 and FY27. Amid strong demand prospects, major cement companies are expanding their capacities through both organic and inorganic methods to strengthen their market share.

It mentioned the industry is expected to add 42-44 million MTPA capacity in FY27, after 43-45 million MTPA capacity addition in FY26. Some regions, like 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. It added, overall, the industry’s capacity utilization is projected to remain stable at 70-71 per cent in FY27, similar to FY26, on an expanded base.
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