New Delhi [India], July 5 : The robust demand for real estate, which gains support from the government's major housing initiatives such as the Pradhan Mantri Awas Yojana (PMAY), will sustain the momentum in cement demand, said a report by Axis Securities.
"The projected growth in the real estate market, coupled with the government's major housing initiatives such as the Pradhan Mantri Awas Yojana (PMAY), is expected to sustain the momentum in cement demand.
The report added that the large-scale construction initiatives under the various government schemes, including PMAY, are expected to drive sustained demand for building materials, particularly cement, which remains essential for housing infrastructure.
According to the report, the cement demand is expected to grow in the range of 7 per cent-8 per cent in FY26, supported by the government's emphasis on infrastructure development and sustained real estate activity.
Additionally, the allocation to infrastructure and construction in the 2025-26 budget is likely to further strengthen cement demand momentum in FY26, the report added.
"The projected growth in the real estate market, coupled with the government's major housing initiatives such as the Pradhan Mantri Awas Yojana (PMAY), is expected to sustain the momentum in cement demand," the report added.
The Cement sector witnessed a subdued performance in the first half of the financial year 2025 (Q1FY25), with year-on-year (YoY) growth of only 2-3 per cent.
Cement demand witnessed a notable recovery in Q3 and Q4FY25, expanding at a high single-digit pace.
The report highlights that this positive momentum is expected to sustain into Q1FY26, supported by increased government capital expenditure and a revival in construction activity.
For the full year FY25, the industry recorded overall growth in the range of 4-5 per cent.
Core sector data released by the central government confirms an 8 per cent YoY growth in cement output during Apr-May'25, driven by robust activity in infrastructure and construction.
Historically, Q4 and Q1 have been peak periods for cement consumption due to favourable weather, accelerated infrastructure spending, and a seasonal uptick in real estate activity.
"Looking ahead, the demand environment remains strong, and the positive trend is expected to continue in Q1FY26. While pricing may remain competitive due to heightened competition and incremental supply, cement manufacturers are likely to benefit from sustained volume growth," the report added.
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