Industry Analysis  - ( 19/10/2025 To 25/10/2025  )

CEMENT INDUSTRY

Introduction

  • India is the 2nd-largest cement producer globally, contributing over 8% of total installed capacity.
  • Strong resource base: abundant limestone reserves and coal availability.
  • Growth driven by infrastructure expansion, rural & affordable housing, and urbanisation.
  • Key government initiatives boosting demand:
    • Development of 98 smart cities
    • Large infrastructure allocations
    • Housing schemes like PMAY (Urban & Rural).
  • Rural housing accounts for about one-third of total cement consumption.
  • Foreign investment increasing — global majors (LafargeHolcim, Heidelberg, Vicat).
  • Focus on sustainability, capacity expansion, and industry consolidation.

Market Size & Performance

  • 210 large cement plants in India (as of March 2025).
    • South India holds 32% capacity; North 20%; West 15%; Central 13%; East 20%.
  • FY25 volumes: 453 million tonnes (↑6.3% YoY).
  • March 2025: 46.5 MMT (↑12% YoY).
  • May 2025: 39.6 MMT (↑9% YoY).
  • Price trends: +8% YoY; Southern India saw Rs.10/bag hike in August 2025.
  • Port traffic: 2.98 MMT (↑34% YoY).
  • Northeast Frontier Railway freight: ↑71% YoY (Apr–Jul 2025).
  • Freight and logistics indicators:

Demand Drivers

  • Government spending:
    • +10% rise in central infrastructure outlay.
    • +11% in 12 major states (as of May 2025).
  • Rural housing: 32–34% of total demand (boosted by farm income and schemes).
  • Urban housing: strong rebound due to PMAY-Urban & lower interest rates.
  • Consumption forecast:
  • FY24: 445 MMT
  • FY27: 450.78 MMT
  • FY30: 670 MMT (7–8% CAGR).

Capacity Expansion & Investments

  • 150–160 MT new capacity expected (FY25–FY28).
  • Rs. 1.25 lakh crore (US$ 14.6 billion) to be invested for 130 MT new grinding capacity.
  • Top 10 players to acquire 140 MT capacity (Rs. 89,000 crore).
  • Karnataka alone approved Rs. 17,183 crore investments (12,500 jobs).
  • Exports: Rs. 5,845 crore; Imports: Rs. 1,543 crore in FY25.
  • Bullet Train Corridor (Mumbai–Ahmedabad): 20,000 m³ cement daily — major demand multiplier.

Key Company Developments

  • JSW Cement: plans to triple capacity to 60 MTPA; IPO Rs. 3,600 crore.
  • UltraTech Cement: capacity ~189 MTPA, targeting 200 MTPA by 2027;
    • Rs. 32,400 crore investment; strong focus on green energy (1.36 GW).
  • Dalmia Bharat: expanding to 75 MTPA; Rs. 6,520 crore capex.
  • Shree Cement: targeting 80 MTPA by FY28; Rs. 7,000 crore expansion.
  • Ambuja Cements (Adani): 100 → 140 MTPA by FY28; Penna Cement acquisition.
  • ACC (Adani): crossed 100 MTPA; record 42.2 MT volumes in FY25.
  • Ramco Cements: Rs. 1,403 crore expansion; new construction chemicals brand “Hard Worker.”
  • HeidelbergCement India: green energy focus (40–90% renewable); new Jhansi plant expansion.
  • M&A trend: 10+ deals worth US$ 3.5 billion in 2024 (highest since 2014).

Government Initiatives

  • PMAY (Housing for All): Rs. 19,794 crore allocation in FY26.
  • Gujarat’s PMAY (Rural): Rs. 50,000 roof-plastering aid for 34,000 families.
  • GST revamp (Sept 2025): expected cement price cut by Rs. 30–35 per bag.
  • Budget 2025–26:
    • Roads Ministry: Rs. 2.87 lakh crore (↑3%).
    • Infrastructure: Rs. 11.2 lakh crore total allocation.
  • National Infrastructure Pipeline (NIP): expanded to 9,305 projects.
  • PM Gati Shakti – NMP: aims for multimodal transport and logistics synergy.
  • Overall cement demand growth expected at 7–8% in FY26.

Road Ahead

  • Infrastructure focus to continue — smart cities, transport, and logistics hubs.
  • Eastern India to emerge as a new growth market.
  • Export potential: India poised to become key exporter of clinker and grey cement to Middle East & Africa.
  • Port-based plants (e.g., Gujarat, Visakhapatnam) to have export advantages.
  • Foreign participation likely to rise due to strong margins and consistent demand.

 

  

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