New Delhi, July 4 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, a report showed on Friday.
While prices have recovered sharply YTD (year to date) across regions and have been resilient despite early monsoons, price stability at the current levels is key to FY26 profitability, said the report by BNP Paribas India.
“At the same time, we expect pricing power to improve, driven by industry players increasingly prioritising profitability and continued industry consolidation,” said Nirransh Jain, India analyst-consumer durables.
India’s cement sector has grown to be the world’s second largest, by production, but scale does not change its inherent cyclicality.
Although recent years have been challenging on new supply, subdued utilisations, and limited pricing power, “we think the cycle is now turning and driving an improved outlook”, the report mentioned.
The industry suffers from oversupply (660 MTPA capacity vs 440 MTPA demand).
“But we see improving demand/supply dynamics as industry consolidates, given market-share gains by the four largest players (58 per cent of total capacity in FY25 vs 45 per cent in FY19); organic expansion now dominated by the top 4; and rising mine auction premiums and royalties favouring leaders who secured raw-material supply through aggressive limestone-mine bids,” the report explained.
The combined Index of Eight Core Industries (ICI) increased by 0.7 per cent in May compared to the same month last year, according to the Ministry of Commerce and Industry data. The production of cement, steel, coal, and refinery products recorded positive growth last month.
The final growth rate of the Index of Eight Core Industries for February, March and April was observed at 3.4, 4.5 and 1.0 per cent, respectively, said the ministry.
Cement production rose by 9.2 per cent in May. Its cumulative index increased by 7.8 per cent during April to May, 2025-26 over the corresponding period of the previous year.
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