New Delhi, Sep 16 India's cement industry will see around 7 per cent annual demand growth for next three years, a report said on Tuesday.
HSBC Global Research expressed a positive outlook on the country's cement industry saying that FY26 will be the peak of capacity additions in the current market cycle.
The top four players now hold 57 per cent of the market, the report mentioned. HSBC anticipates that this consolidation will enhance pricing power.
Cement prices are expected to increase starting in November, driven by high leverage among smaller competitors and larger companies not being to afford a price war due to similar leveraged position, the brokerage said.
HSBC projected EBITDA per ton to grow at a 13 per cent CAGR over FY25-28e, supported by average selling prices per ton rising 3.6 per cent in FY26, 2.5 per cent in FY27, and 2.1 per cent in FY28.
“Demand decreased significantly to approximately 3 per cent in FY25 following three years of robust growth,” the report said.
“We expect a recovery in 2HFY26 and believe that a combination of a large base and steady government capex will see demand growth normalise in the 6-7 per cent range annually over the next three years,” the brokerage added.
Risks involve a sharp decline in government capex, which it feels unlikely to occur and a slowdown in housing.
Analysts had earlier predicted that cement companies stand to gain as GST cut from 28 per cent to 18 per cent could reduce cement prices by about 7–8 per cent.
Meanwhile, in July this year, a report by BNP Paribas India said that the demand in the Indian cement sector is expected to rebound to 7-8 per cent in FY26 and to grow by 6 per cent CAGR over FY26-29 on structural factors.
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