India's cement industry to grow 6-7% in FY27, aided by housing and infra sector: ICRA

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• India's cement industry expected to grow 6-7 percent in FY27
• 85-90 million MTPA capacity addition projected for FY26-FY27
• GST cut and infrastructure spending to boost cement demand

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The Indian cement industry is anticipated to sustain its mid single-digit growth journey in the nest fiscal, helped by the factors including steady demand from housing and infrastructure projects, said rating agency ICRA in its report.

It expects India's cement industry to grow about 6 to 7 per cent in FY27, and touch 6.5 to 7.5 per cent growth in the current fiscal year FY26.

Moreover, the agency also expects the industry "to add 85-90 million MTPA capacity during FY2026-FY2027", while operational EBITDA is estimated to be at Rs 880-930 per Metric Tonnes (MT) in FY2027 helped by better pricing and higher volumes.

"Cement demand remained strong, with volumes expanding by 8.5 per cent in FY2026, aided by robust construction activities. With post-monsoon construction expected to pick up pace, a sequential improvement in demand is likely to take place in H2 FY2026," it said.

Besides, GST reforms, which slashed duty on finished cement from 28 per cent to 18 per cent, along with increased spendings by the government on infrastructure spending, is expected to bolster demand momentum through FY2026 and FY2027.

Amid healthy demand prospects, major cement companies are expanding capacities through both organic and inorganic means to further strengthen their market share.

"The industry is expected to add 42-44 million MTPA capacity in FY2027, after 43-45 million MTPA capacity addition in FY2026," it said.

Some regions such as north and central India are likely to witness higher capacity utilisation than the national average of about 70 per cent, while the southern region may continue to witness relatively moderate utilisation due to capacity overhang.

Overall, capacity utilisation of the industry is projected to remain stable at 70-71 per cent in FY2027, similar to FY2026, on an expanded base, it added.

According to the Cement Manufacturers' Association (CMA), the apex body of large cement firms, India's installed cement capacity is 700 MTPA. It is the second largest manufacturer after China.