Capacity utilisation in India’s cement industry is projected to hold steady at approximately 70-71% in FY27, as per a report by Equirus Securities. The industry saw a growth of about 6.5-7.5% in FY26, with an anticipated 5% demand growth in FY27. Despite this, the report suggests that the pace of capacity expansion will likely maintain utilisation levels across the sector.
The northern and central regions are expected to witness higher capacity utilisation, while the southern region may experience more moderate levels due to existing capacity surplus. In FY27, industry capacity additions are estimated to reach 42-44 MTPA, following 50-55 MTPA in FY26.
The report highlights that demand remained strong during the year, propelled by robust construction activity post-monsoon in H2FY26. This was supported by ongoing momentum in housing and infrastructure sectors. The cement industry continues to benefit from urbanisation, rising housing needs, and government investments in various infrastructure projects.
Leading cement producers are actively expanding through organic and inorganic means to position themselves for long-term demand growth. The industry is expected to focus on operational efficiency, utilisation enhancement, and return ratios as new capacities come online.
Long-term growth prospects for the cement sector in India look promising, driven by increased infrastructure spending, affordable housing initiatives, manufacturing investments, Smart Cities projects, and the National Infrastructure Pipeline. The country’s per-capita cement consumption remains below the global average, indicating further growth potential.
As industry capacity additions are set to remain high in the near future, maintaining stable utilisation levels, enhancing operational efficiency, and maximizing asset productivity will become increasingly crucial across the sector.
