CONCRETE COMEBACK

India's cement sector is once again brimming with new energy, and seeing higher profits and renewed demand. Can this revival translate into lasting growth?

- By ASHISH SINHA

THE STORY OF India's cement industry in the past two years has been a rollercoaster of muted growth, rising costs, and hesitant demand.

But as FY2026 begins, the mood has decisively shifted. Recent reports from both ICRA and CRISIL confirm what industry watchers had been anticipating: the sector is on the cusp of a strong revival.

According to ICRA, the cement industry grew 6.3 per cent year-over-year in FY2025 to 453 million tonnes (MT). The month of March alone saw a sharp 12 per cent jump, touching 46.5 MT, signaling a rebound in momentum. For FY2026, the rating agency expects volumes to grow 6-7 per cent to around 480-485 MT, supported by strong housing demand, infrastructure spending, and rural recovery.

CRISIL, too, paints a rosy picture. After a relatively subdued FY2025, it expects demand to rise 6.5-7.5 per cent this fiscal, while operating profitability is projected to improve nearly Rs 100 per tonne. The key driver here is a combination of lower input costs, better price realisations, and steady demand from housing and infrastructure.

Even on the ground, the numbers speak for themselves. In May 2025, India's cement output rose 9 per cent year-over-year to 39.6 MT, while average cement bag prices went up 8 per cent to Rs 360. Analysts now predict a strong June quarter for cement companies, with profits expected to surge anywhere between 30 per cent and 80 per cent.

This turnaround is anchored in three factors. First, rural housing is back in demand, aided by government subsidies and a good monsoon. CRISIL highlights a 7-8 per cent growth in rural demand, which makes up about a third of total consumption. Second, infrastructure continues to be a steady engine of growth—roads, bridges, metros, and housing projects are all absorbing capacity. Third, input costs have cooled off. Coal prices fell 23 per cent in FY2025, petcoke 13 per cent, and even diesel prices dropped 2 per cent, all helping producers protect margins.