Cement Sector to Invest ₹1.25 Lakh Cr by FY2027 Amid Strong Demand

Indian cement manufacturers are set to invest approximately ₹1.25 lakh crore between FY2025-2027, driven by strong demand and the push for market share. This investment is 1.8 times higher than the capex of the past three years. Despite the surge, credit risk profiles are expected to remain stable due to low capex intensity and strong balance sheets, with financial leverage staying below 1x.
A CRISIL Ratings analysis of 20 cement makers, representing over 80% of the industry’s capacity, highlights this trend. The past three fiscals saw a ~10% annual increase in cement demand, pushing utilisation levels to a decade-high of ~70% in FY2024, prompting this significant capex.
Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL Ratings, noted that cement demand is projected to grow at a ~7% CAGR over FY2025-2029. Around 130 million tonnes of new cement grinding capacity, nearly a quarter of the current capacity, is expected to be added during this period. Despite the increased capex, the credit profiles of cement manufacturers are likely to remain stable, supported by healthy operating profitability and the ramp-up of new facilities.