Concrete

GST 2.0: Strengthening the Cement Sector

Published

9 months ago

September 11, 2025

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The reduction of GST on cement from 28 per cent to 18 per cent marks a landmark correction in India’s tax regime. This reform promises lower construction costs, greater housing affordability and stronger momentum for infrastructure development.

In a major structural reform, the GST Council has slashed the tax rate on cement from 28 per cent to 18 per cent, aligning it with other core construction materials. This long-overdue move corrects a tax anomaly, as cement had been taxed significantly higher than steel, bricks, and other inputs. The tax reform is part of India’s broader ‘GST 2.0’ framework, simplifying the slab structure to just two tiers—5 per cent for essentials and 18 per cent for most goods and services.
According to analysts at Yes Securities, the industry will likely pass on most of the savings to end-users, moderating any immediate spike in profit margins.
Dharmender Tuteja, CFO, Dalmia Bharat, says, “The reduction of GST rates for goods and services of mass consumption and particularly on cement from 28 per cent to 18 per cent is a very positive step, both for consumers and industry. It will set in motion a virtuous cycle of creating higher purchasing power in the hands of wider cross section of population leading to higher consumption of goods and services and GDP growth in the economy leading to higher demand for cement also. Reduced prices of cement and higher purchasing power specially increase the affordability of housing for middle and lower-income groups spurring the demand for cement. Reduced prices also improve affordability of premium categories of cement leading to likely shift of demand towards these categories. Dalmia Bharat welcomes this move and will meet the expected rise and shift in cement demand responsibly and sustainably.”
The reduction translates to meaningful savings of around Rs.25–Rs.30 per 50 kg bag of cement—equating to lower construction costs for developers and faster affordability for homebuyers. According to the Economic Times, this input cost drop is expected to translate to overall construction cost reductions of approximately 3 per cent to 5 per cent, which could bring down affordable housing prices by 2 per cent to 4 per cent. As a result, developers in this segment may reinvigorate projects and boost demand.
While long-term gains are apparent, cement manufacturers may experience short-term margin pressures. A news report noted that companies are expected to aggressively pass on the GST cut benefits, limiting immediate pricing flexibility. Concurrently, stock prices of major cement players surged—Ambuja Cements and ACC saw gains up to 4 per cent, reflecting positive investor sentiment toward this development.
Vivek Bhatia, Managing Director and CEO, TKIL Industries, says, “The 56th GST Council reforms are a forward-looking step towards Viksit Bharat! We welcome the initiative to place more purchasing power in the hands of consumers which will certainly accelerate broad-based economic growth! At a time of global uncertainty, the reforms provide a welcome boost to clean energy and industrial transition. The cut in GST on cement from 28 per cent to 18 per cent will speed up infrastructure development and make adding capacity more appealing. Cutting GST on renewable devices and fuel-cell vehicles aligns India with its decarbonisation strategy. It gives manufacturers a better case for boosting sustainable solutions. From the perspective of TKIL Industries, these reforms will go far beyond just the tax reduction that will be immediate, but will provide a big positive push, reinforcing our position as the fastest growing leading economy, fast track our growth to becoming the third largest economy, accelerate Make in Bharat, promoting cleaner technology, positioning Bharat as a global leader in the energy transition. Our congratulations and appreciation to Central and State Government leaders for taking this bold and welcome step!”
Lower cement prices are poised to create demand ripples across related sectors such as paints, fittings, and interiors. Another news report highlighted that reduced building costs may increase disposable income, encouraging homeowners to invest in premium finishes and accessories. This, in turn, could bolster sales in downstream industries and help stimulate broader construction-related economic activity.
“India’s historic GST reform is poised to drive stronger execution momentum across the infrastructure sector. The reduction in GST on cement is expected to unlock working capital, improve cash flow efficiency and accelerate project delivery timelines. In parallel, lower GST rates on various consumer-facing categories are likely to boost consumption, creating a more favourable environment for sustained economic activity. This, coupled with the ongoing infrastructure push, is expected to catalyse private sector capex, adding further depth to the investment cycle. A timely and progressive reform that aligns with KEC’s focus on faster execution, operational excellence, and balance sheet strengthening—reinforcing India’s infrastructure growth story,” says Vimal Kejriwal, Managing Director and CEO, KEC International.
Despite enhanced affordability and potential demand revival, near-term demand may remain inelastic due to seasonal factors and supply-side bottlenecks, such as labour shortages and sand mining constraints. Yes Securities has projected that meaningful demand pickup may materialise post-festive season, likely in the December quarter. Therefore, while the GST cut offers a significant structural lever for growth, sustained industry recovery may depend on complementary policies and market conditions.

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Dalmia Bharat Acquires Jaiprakash Associates Cement Assets for ₹2,850 Crore

Published

10 hours ago

May 25, 2026

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Dalmia Cement executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra, to acquire 5.2 MnTPA of cement capacity across Madhya Pradesh and Uttar Pradesh.

Dalmia Cement (Bharat) announced on May 22, 2026 that it had signed a Business Transfer Agreement with Jaiprakash Associates Limited and Adani Infra (India) Limited for the acquisition of cement plants located at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh. The deal was struck at an enterprise value of ₹2,850 crore and is expected to close within two weeks of execution.

The acquired assets from Jaiprakash Associates include 5.2 MnTPA of cement capacity and 3.3 MnTPA of clinker capacity. The package also covers 99 MW of thermal power capacity and railway sidings at Rewa, Chunar, and a common siding at Churk. This infrastructure gives the acquisition immediate operational utility beyond just production tonnage.

The transaction has a long backstory. Dalmia Cement had originally entered into a framework agreement with Jaiprakash Associates in December 2022, covering the sale of these business assets along with a long-term clinker supply arrangement. However, before the deal could be completed, Jaiprakash Associates was admitted to insolvency proceedings under the Insolvency and Bankruptcy Code. The earlier agreements could not be consummated as a result.

In an official statement, Puneet Dalmia, Managing Director & CEO, Dalmia Bharat, said, “I am very excited about addition of these assets in our portfolio. This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan India player and provide a strong head start to serve the high potential markets in Central region. I am optimistic that the expansion potential of these assets along with close proximity with Dalmia’s captive mines will help us create a capacity hub for the future”.

Following the approval of Adani Group’s resolution plan for Jaiprakash Associates under the IBC framework, Dalmia approached the new management to revive discussions. The fresh Business Transfer Agreement was executed to settle all pending disputes, legal proceedings, and arbitration matters arising from the original framework agreement with Jaiprakash Associates.

Expanding market reach

Dalmia added, “Our familiarity with these assets under the earlier tolling arrangement gives us a deep understanding of the facilities and helps us establish strong connect with channel partners and vendors. We believe that this will help us in faster ramp up of capacities and quicker inroads into the market. As we look forward, I am very confident that we will be able to leverage the strengths of Dalmia to operate these assets in a manner where we can maximise value creation for all our stakeholders.”

With the addition of these plants, Dalmia Bharat’s total installed cement capacity will rise to 54.7 MnTPA upon consummation. The company has further expansion projects underway at Belgaum, Pune, and Kadapa, which are expected to take overall capacity to 66.7 MnTPA by Q2 to Q3 FY28.

The Central India location of the Jaiprakash Associates plants gives Dalmia Bharat faster access to markets in Madhya Pradesh and Uttar Pradesh than a greenfield build would have allowed. The company also cited debottlenecking and brownfield expansion as near-term opportunities at the acquired sites. Dalmia Bharat said the assets were expected to contribute positively to EBITDA and overall returns, given the pricing environment in the region and the company’s cost structure.

Concrete

30-Day Traffic Diversion In Place For CC Road Works In Madhapur

Diversions in place from May 16 for cement concrete road works

Published

3 days ago

May 22, 2026

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The Cyberabad Traffic Police issued a traffic advisory as road works begin for the laying of a cement concrete (CC) road from Jaya Shankar Statue to RRR Restaurant at Parvathnagar in Madhapur limits. The advisory indicated that traffic diversions will be in place for 30 days from May 16 to ensure the smooth flow of vehicles and to minimise congestion on the affected stretch. The measure aims to balance uninterrupted construction activity with the movement needs of commuters.

Traffic moving from Toddy Compound towards Parvathnagar village will be diverted at Parvathnagar junction towards Sunnam Cheruvu and the 100 feet road. Local motorists and public transport operators have been advised to follow the diversionary route as directed by traffic personnel on duty. Alternate routes and signage have been planned to mitigate delays and to manage peak hour congestion.

Police officials said the diversion had been planned to facilitate uninterrupted road works while maintaining traffic movement in the area. Commuters were urged to plan their travel accordingly and to cooperate with traffic staff managing the stretch. Authorities indicated that enforcement of diversions would be active and that violations could attract penalties.

The 30 day schedule is intended to allow contractors to complete the laying and curing phases with minimal interruption to vehicular flow. Residents and businesses in adjacent localities have been advised to factor the diversion into deliveries and travel plans. The traffic police promised continuous monitoring of the works and the operational diversions and emphasised that temporary inconvenience was necessary for longer term improvement of the road network. Traffic personnel will be stationed at key junctions and additional signage and temporary markings will be displayed to guide motorists and pedestrians through the revised alignments while public transport services will follow the diversion where feasible and operators have been asked to adjust timetables to minimise disruption.

Concrete

HeidelbergCement India Receives Consent For Khandwa Grinding Unit

Consent granted by Madhya Pradesh Pollution Control Board

Published

4 days ago

May 21, 2026

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HeidelbergCement India (HeidelbergCement India) has received regulatory consent to establish a cement blending and grinding unit at Village Dongaliya, Tehsil Punasa, District Khandwa in Madhya Pradesh. The consent was granted by the Madhya Pradesh Pollution Control Board under the Water (Prevention & Control of Pollution) Act, 1974 and the Air (Prevention & Control of Pollution) Act, 1981 and is dated 17 May 2026. The company disclosed the development in a filing made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The project plan envisages procurement of long term availability of fly ash and the allotment of land on lease for setting up the unit. The proposed facility is described as a blending and grinding installation which will process cementitious materials sourced from nearby operations and suppliers. Company filings state the measures required to secure raw material logistics and statutory compliance before commencing construction.

The addition of a grinding unit in Khandwa is intended to strengthen regional supply and improve logistical efficiency by reducing haulage distances for finished product. The unit is expected to complement existing capacities in central India and to offer flexibility in product mix through blending operations. The reliance on fly ash as a supplementary cementitious material will necessitate long term supply agreements with thermal power producers and coordination with waste utilisation policies.

The disclosure to the regulator and to the stock exchanges follows standard corporate governance practice and aims to keep investors apprised of capital expenditure initiatives. The company indicated that subsequent permits and clearances would be sought in accordance with applicable environmental and land use rules. The project is presented as part of HeidelbergCement India’s broader strategy to optimise capacity distribution and to respond to regional demand dynamics.