Concrete

Cement Sector Growth Slows Down

Muted demand lowers FY25 growth forecast

Published

2 years ago

December 2, 2024

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The Indian cement industry’s growth forecast for FY25 has been revised down to 4-5% (445-450 MT), primarily due to sluggish construction activity in the housing and infrastructure sectors, according to ICRA. The initial estimate in July was 7-8%, expecting demand to rise in H2, but a slower-than-expected post-election recovery has affected projections.

Key Drivers and Challenges

Muted Volumes: Cement volumes grew just 2% YoY to 212 MT in H1 FY25, impacted by election-related slowdowns and heavy monsoon rains.
Rural Demand: A robust rabi season backed by healthy monsoons and strong farm cash flows is expected to improve rural housing demand in H2.
Urban and Infrastructure Boost: Urban housing demand remains strong, while increased government capital spending in H2 FY25 (from ?4 lakh crore in H1 to meet a full-year target of ?11.1 lakh crore) should spur infrastructure activity and cement demand.
Pricing and Margins

Cement prices fell 10% YoY to ?330 per bag in H1 FY25 due to oversupply and subdued demand, affecting revenue realisation.
Operating profit margins dropped to 12% in Q2 FY25, a 375 bps decline YoY, despite reduced coal and pet coke costs (down 38% and 13% YoY, respectively).
Capacity Expansion

The industry is expected to add 70-75 MT capacity during FY25-26, with 33-37 MT as clinker capacity.
Regional Growth: Eastern and southern regions will lead capacity additions, contributing 38-40 MT evenly split over two years.
Utilisation: Capacity utilisation is projected to rise slightly to 71% in FY25 from 70% in FY24.
Outlook
The cement sector is poised for a recovery in H2 FY25, driven by rural and urban housing demand and higher government spending. However, pricing pressures and oversupply remain challenges. Total installed capacity stands at 690 MT, with moderate utilisation rates indicating room for demand-driven growth.

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Cement Firms to Invest Rs. 130 bn in Green Energy by FY28

Cement companies plan to expand clean energy capacity to 6 GW by FY28

Published

1 day ago

September 17, 2026

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India’s major cement companies are set to raise their clean energy capacity to 6 GW by March 2028 from around 4 GW at the end of March 2026, according to ratings agency ICRA. The planned expansion is expected to involve investments of Rs. 130 bn over the next two years.

The additional capacity could generate annual savings of Rs. 62 bn to Rs. 67 bn, resulting in an estimated payback period of 1.8 to 2.2 years. Cement is an emission-intensive industry, and leading producers have established net-zero roadmaps covering the next 15 to 20 years.

The calcination process accounts for 57 to 60 per cent of the sector’s total emissions, while fuel combustion contributes 27 to 30 per cent and electricity consumption accounts for 10 to 13 per cent. ICRA said the figures highlighted the need for a broad decarbonisation strategy involving green power, blended cement, alternative fuels and improvements in clinker efficiency.

Green energy is considered one of the most commercially attractive decarbonisation options because it can reduce emissions while lowering operating costs. Every 5 per cent increase in green power replacement can reduce power and fuel costs by Rs. 15 to Rs. 16 per tonne. A 25 per cent replacement level could therefore save Rs. 75 to Rs. 80 per tonne and expand operating margins by 140 to 160 basis points.

Cement producers are also assessing carbon capture, utilisation and storage, although high implementation costs, energy requirements and limited transport and storage infrastructure are expected to slow commercial adoption. The government has proposed Rs. 200 bn over five years to support deployment across key sectors. Meanwhile, companies are targeting thermal substitution rates of 10 to 15 per cent over the next three to five years, compared with the current industry level of around 6 per cent.

Concrete

Centre Defers Clearance for Limestone Mine Near Bustard Habitat

Panel seeks revised mining plan and safeguards for pipelines and wildlife

Published

2 days ago

September 16, 2026

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The Centre has deferred environmental clearance for a proposed limestone mine near a Great Indian Bustard habitat in Ramgarh, Rajasthan’s Jaisalmer district. The critically endangered species has an estimated wild population of about 130 in India.

Concrete

Telangana to Supply Subsidised Cement for Indiramma Houses

Poor families allotted Indiramma houses to receive cement at Rs. 230 per bag

Published

2 days ago

September 16, 2026

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The Telangana government will supply cement at a subsidised price of Rs. 230 per 50-kg bag to poor and low-income families allotted Indiramma houses. The prevailing market price is between Rs. 310 and Rs. 320 per bag, the Assembly was informed on Thursday.