Cement Industry Ready for Big Growth in FY26 as Companies Gain Control Over Prices
The Indian cement industry is poised for a strong recovery, with demand projected to rebound to 7–8% in FY26, according to a recent report by BNP Paribas India.
New Delhi: The Indian cement industry is poised for a strong recovery, with demand projected to rebound to 7–8% in FY26, according to a recent report by BNP Paribas India. The report also forecasts a 6% CAGR growth from FY26 to FY29, driven by structural tailwinds and market consolidation.
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Cement Prices Stable Despite Early Monsoons
The report notes that cement prices have sharply recovered year-to-date (YTD) across all regions and remained resilient, even with the onset of early monsoons. However, price stability at current levels will be crucial for maintaining profitability in FY26.
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“We expect pricing power to improve as companies focus more on profitability amid ongoing industry consolidation,” said Nirransh Jain, Analyst at BNP Paribas India.
Industry Consolidation Driving Better Demand-Supply Balance
India is currently the second-largest cement producer globally, but it faces chronic oversupply—with production capacity at 660 MTPA versus demand at 440 MTPA. However, BNP Paribas believes the cycle is turning, supported by:
- Increased market share by top 4 players (now 58% vs 45% in FY19)
- Organic capacity expansion dominated by leading companies
- Favorable mine auction policies benefiting established players with secure limestone supply
Cement Output Sees Robust Growth in May 2025
According to data from the Ministry of Commerce and Industry, cement production rose by 9.2% in May 2025. The cumulative cement index grew by 7.8% for April–May 2025–26 compared to the same period last year.
The Index of Eight Core Industries (ICI) also showed modest improvement, with an overall growth of 0.7% in May, boosted by positive performance in cement, steel, coal, and refinery products.
Outlook: Structural Growth Backed by Profit Focus
With improving demand-supply dynamics, stable pricing, and industry consolidation, India’s cement sector is entering a positive cycle. Analysts expect these trends to support long-term profitability and sustained demand growth through FY29.
