Cement companies expect demand to remain robust, shrug off slowdown concerns

Industry executives are confident of demand growth in the current quarter amid increased government spending on infrastructure.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Indian cement makers expect single-digit growth in the coming quarters on healthy demand, shrugging off any slowdown concerns due to the upcoming parliamentary elections.

Industry executives said they were confident of demand growth in the current quarter amid increased government spending on infrastructure, rural development and expansion of the housing sector.

Given the lower operating costs and the potential to hike prices, companies anticipate demand growth of 6 percent to 10 percent in the coming quarters. The building material makers may try to increase prices by Rs 10-30/bag across regions this month, Emkay analyst Dharmesh Shah wrote in a note last week.

During the third quarter, UltraTech Cement, ACC, Ambuja Cements and Shree Cement saw their consolidated net profit soar on the back of healthy demand and lower petroleum coke costs.

"The industry growth should be about 6 percent... in January, we are seeing very robust numbers for the entities. So, I am very confident that, going forward, we should have a healthy growth," said Ajay Kapur, chief executive officer of Adani Cement Industries, ACC and Ambuja Cements.

Demand for cement slowed in December due to elections in four states, flooding in some southern states and a ban on construction to curb air pollution. However, activity picked up mid-December onwards, according to Atul Daga, chief financial officer of UltraTech.

"The signs are very good. Still, if I have to put a number, we will definitely cross 80-85 percent (utilisation rate) for sure," Daga said, adding that the company expects demand growth of 8 percent to 9 percent.

Shree Cement expects sales volumes to reach 35 million tonnes in FY24 and 40 million tonnes in FY25. The cement maker's senior advisor Ashok Bhandari said it expects demand growth of 8 percent to 10 percent.

"We are in line with the industry. In fact, we should be about 12 percent this year," Bhandari said.

However, analysts expect profitability of cement companies to remain flat or decline sequentially in the fourth quarter of FY24.

"We believe absorption of the same (price hikes) will be difficult owing to the recent decline in fuel prices and increasing focus of companies on volume push to gain market share," said Shah of Emkay.

The race for market share has led the big boys of the cement industry to expand both in organic and inorganic ways. UltraTech’s recent acquisition of Kesoram Industries reinforced the industry's ambitions to consolidate to protect and gain market share on expectations of robust demand, driven by increased spending on infrastructure projects in the country.

UltraTech is poised to spend Rs 9,000 crore in this financial year and FY25. Cement companies of the Adani Group expect capital expenditure of Rs 4,000 crore to Rs 5,000 crore over each of the next three to four years.

"For FY24, we are expecting Rs 3,500 crore overall outflow," Kapur added.