India’s cement industry is expected to see a 6-7% growth in volumes in the financial year 2026-2027, following a 6.5-7.5% rise in the previous year. The industry is projected to add 42-44 million MTPA capacity in FY27, slightly lower than the previous year’s capacity addition.
According to the rating agency ICRA, cement demand remains robust, with volumes expanding by 8.5% in the first eight months of FY26, driven by strong construction activities. Post-monsoon, construction is anticipated to accelerate, leading to an upsurge in demand in the second half of FY26.
The reduction in GST on cement and the government’s focus on infrastructure spending are expected to further boost demand in the coming years. Major cement companies are expanding their capacities through organic and inorganic means to enhance their market share.
ICRA’s Vice President highlighted that profitability is expected to improve significantly in FY26, with OPBITDA/MT rising to Rs 900–950/MT from Rs 810/MT in FY25, supported by better pricing and higher volumes. Looking ahead to FY27, the industry is poised for steady growth of 6-7%, driven by sustained demand from the housing and infrastructure sectors.
ICRA foresees a 2-4% increase in cement prices on average in FY27, following a 3-5% rise in the previous year, bolstered by strong demand. The rating agency maintains a ‘Stable’ outlook for the domestic cement sector.
