India’s cement sector is poised for strong growth in FY2026, with volumes expected to rise 6–7% year-on-year, reaching 480–485 million metric tonnes (MT), according to the latest report by ICRA. The growth is driven by robust demand from the housing and infrastructure sectors.
Capacity addition is projected at 40–42 million metric tonnes per annum (MTPA), up from 31 MTPA in FY2025. The eastern region is expected to lead this expansion, adding around 14–15 million MTPA. Despite the growing demand, capacity utilisation is likely to remain steady at 70% due to the expanded base.
Average pan-India cement prices stood at ₹340 per bag in FY2025, down from ₹365 in FY2024, due to weaker demand in the first half. However, prices saw a 4–5% hike in the second half of FY2025 and are expected to rise 3–5% in FY2026. Input costs, including petcoke and freight, are expected to remain stable but will continue to be influenced by global crude prices and geopolitical developments.
ICRA expects revenue for major cement companies to grow by 12–14% in FY2026, supported by 8–9% volume growth and 3–5% price increases. Operating profit per tonne (OPBITDA/MT) is projected to improve by 10–14%, reaching ₹880–₹920/MT, with operating margins rising to 16.3–17.0%.
Even with ongoing capex, total debt levels are likely to decline by 7–8% due to repayments by major players. As a result, debt protection metrics are expected to remain strong, with leverage (TD/OPBITDA) at 1.2–1.3x and debt service coverage ratio (DSCR) at 3.4–3.5x.
While large companies are expected to perform well, ICRA notes that mid-sized and smaller players may face challenges in the near term.
