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Overview of Indian aggregate industry

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ICR shall be publishing a series of six articles starting from this month to cover the subject of aggregates. Manufactured sand is one subset of aggregates. Cement is used as a binder with aggregates. The aggregate industry in India is an unorganised sector and undergoing a lot of changes, which were long pending, writes Sanjay Nikam, a founding member of the Aggregate Association of India.


Sanjay Nikam

Aggregate is very important building material for construction industry. Aggregate includes coarse aggregate, river sand and gravel, M-sand and aggregate for other applications. Other applications includes road base, railway ballast, soling, pitching and coastal applications. Majority of aggregates find routes in which aggregates are combined with other materials such as cement and bitumen to be used in the construction industry. Aggregates going through the cementation route is the largest user segment for aggregates and is easy to estimate as cement consumption data is well recorded and available.

Aggregates consumed in this application are typically six to eight times of the cement consumption. Adding the consumption through the other routes the overall aggregates consumption factor will be around nine to 10 times the cement consumption. In this article, we will see overview of aggregate industry in India, which include broad trends and evolution of technology.

Broad trends

Globally, India is the largest aggregates market after China, it continues to grow fast and is structurally transforming. In the absence of official statistics, the current estimated size of the market is around 3.4 billion tonne. The overall aggregates market is growing at a higher CAGR than cement over the past five years and should continue the same trend going forward on account of the government?? infrastructure thrust on expanding road and rail network.

Aggregates market in India is fragmented with more than 12,000 family businesses with small quarries and low capacity plants, dominated by local players and has very minimal presence of organised players. Every State in India has unique market and is driven by local conditions. Even royalty rules are not uniformly implemented and every state has different royalty rates/ways of collecting royalty. State-to-state sand dredging regulations are also different in India.

There are a few local aggregate manufacturers??associations in scattered clusters mainly involved in addressing cluster specific issues. However, there is no national level aggregates association for raising the standards of the Indian aggregates industry.

At present, aggregates industry in India is fragmented with low capacity plants and lack of organised players. Due to poor implementation of Health, Safety & Environment (HSE) rules by regulators, HSE standards are at nascent stage. In the past, small players were breaching HSE norms easily.However now, consequences for injuries, fatalities and breaching environmental norms are far more serious than before. With the implementation of labour laws and minimum wages act becoming stricter it will erode the competitive position of local unorganised small players who have been flouting these rules to cut costs.

As cities are growing outwards, old quarries near the city borders are finding it difficult to operate due to noise, dust and blasting issues. Simultaneously, the jump in real estate value makes existing quarry locations an attractive destination for real estate development. Both these factors exert pressure on present owners to shut the quarries and shift away from the cities.

The Indian aggregates industry is changing fast with the entry of organised players. This is happening due to the growth of RMC industry and large infrastructure projects demanding high/consistent quality aggregates and higher volumes. Urbanisation is growing at a fast rate. The proportion of urban population, which is expected to reach 30 per cent of the total population by 2020, is slated to grow further and reach 40 per cent by 2041. In fact, as per the UN Atlas of Urban Expansion, India is going to lead the world in urban growth by adding 416 million people in urban area by 2050. Thus to cater to the urban demand, major cities in India will require good quality, high volume building construction materials. Also, the compliance norms are bound to become more stringent.

Fulfilling all these parameters is difficult for local aggregate players; thus, there is an opportunity for the organised players to make an entry in the aggregate business.

In developed countries, most of the leading and successful cement players have cement, aggregates and RMC businesses and they are vertically integrated. Though India is still a developing country, some major cities of India resemble global developed countries to an extent and will have similar opportunities for leading cement companies.

Evolution of technology for aggregates

In the 1980s most aggregate crushers were of small capacities between 3 to 25 TPH. They were mostly jaw crushers with rotary screens, which were not technically up-to-date and their products were of lower quality.

However, due to initiatives of the Ministry of Surface Transport & Highways in introducing higher quality standards in 2000, aggregates were required to have flakiness and elongation index of not more than 30 per cent. In fact, the latest revision to IS383 published in 2016 limits the combined flakiness and elongation index to a maximum of 40 per cent and aggregate crushing and impact values to 30 per cent (for non-wearing surfaces) and 45 per cent (for wearing surfaces). Since, existing technology was not able to meet these new demands of quality and/or quantity, transition was made to mid-sized capacity plants (50 to 150 TPH) by introduction of cone and impact crushers. These changes incentivised the crusher/screen manufactures to innovate and design the plants to meet the market requirements.

In the last decade, with the government?? thrust on large infrastructure projects such as golden quadrilateral, express highways, airports, freight corridors, etc., the demand of high quantities of aggregates resulted in higher capacity plants ranging 200 to 350 TPH. This trend of higher capacity plants continued in commercial aggregates industry also. Enforcement of all statutory compliance are not uniform. There are many challenges for organised/responsible players to enter into long term commercial aggregates business.

One more development during the last decade was that a few States in India started restricting dredging of river sand. Due to this, crushing technology had to evolve to make good quality manufactured sand. This opened the door for advanced manufactured sand technologies made available by Terex, KEMCO (Japan), BHS (Germany), CDE (Ireland), who are globally the best technology provider.

ABOUT THE AUTHOR:

Sanjay Nikam holds a degree in Mechanical Engineering and a post graduate diploma in management. Has more than 20 years of experience in the field of ready-mixed concrete including aggregates. He has extensive exposure to international aggregate business, and presently heads a consultancy organisation since 2016. He can be reached at: suru0913@gmail.com.

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Concrete

Cement Makers’ Margins To Fall Rs 50-75 Per Tonne Amid West Asia Conflict

Crisil Sees Margins Easing Despite Steady Demand

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Crisil said operating margins of Indian cement manufacturers are expected to decline by Rs 50-75 per tonne (t) this fiscal to Rs 925-950 per t due to higher input costs triggered by the West Asia conflict. The analysis covered 18 cement companies accounting for nearly 90 per cent of India’s domestic cement capacity and noted margins had improved sharply to around Rs 1,000 per t in fiscal 2026.

Crisil noted that the reduction would be driven mainly by higher power and fuel costs, which account for about 30 per cent of total costs, as petcoke and imported coal prices have surged amid geopolitical uncertainties. Freight costs, which account for about a quarter of total costs, are also expected to remain elevated because of higher diesel prices. The impact on profitability is likely to be more pronounced in the first half of the fiscal year before easing commodity prices moderate cost pressures later.

The rating agency said steady domestic demand and strong balance sheets should keep credit profiles stable despite the moderation in margins. Green energy currently accounts for 35-40 per cent of the sector’s total electricity consumption and is expected to partly cushion higher energy costs. Operating cash flows are likely to remain resilient, supported by projected 6-7 per cent growth in cement demand this fiscal.

Crisil highlighted that demand growth will be driven primarily by infrastructure spending, which meets about one-third of sector consumption, and by a nearly 18 per cent higher budgetary allocation for core ministries that should support project execution. Weaker rural housing demand amid pressure on agricultural incomes from a possible below-average monsoon may be offset by improved urban housing demand supported by favourable home-loan rates and a strong pipeline of Pradhan Mantri Awas Yojana-Urban projects. Ongoing capacity additions will keep capital expenditure elevated and may lift net debt to EBITDA to between 1.2 and 1.4 times from around 1.0 time last fiscal, though ratios are expected to remain healthy.

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Concrete

UltraTech Board Approves Rs 50 bn Fundraise Via NCDs

Company to issue half a million debentures for expansion plan

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UltraTech Cement’s board of directors has approved raising Rs 5,000 crore (Rs 50 bn) through non?convertible debentures issued in rupees.

The finance committee cleared a proposal to issue up to 500,000 fully paid, unsecured, listed, rated, redeemable, rupee?denominated, non?convertible, non?cumulative debentures of Rs 1 lakh each (Rs 0.1 mn each), aggregating to the Rs 5,000 crore programme.

As of June 2026 the firm reported net debt of Rs 15,875 crore (Rs 158.75 bn) and said its capacity expansion projects under execution are backed by capital expenditure of about Rs 17,000 crore (Rs 170 bn) over the next two to two?and?a?half years.

UltraTech spent Rs 9,500 crore (Rs 95 bn) on capital expenditure in financial year 2026 and in April the group crossed 200.1 mn tonnes per annum of domestic grey cement capacity and 205.5 mn tonnes per annum of global capacity.

The chief financial officer indicated the company would take consolidated capacity beyond 242 mn tonnes per annum, with grey cement capacity reaching 212.7 mn tonnes per annum by the end of financial year 2027. He noted the net debt?to?earnings before interest, taxes, depreciation and amortisation ratio stood at 0.87 times as of June 2026 and the company was confident of ending financial year 2027 with the ratio below one time.

In the first quarter of financial year 2026?27 UltraTech’s net profit attributable to owners rose 16.8 per cent year?on?year to Rs 2,599.3 crore (Rs 25.993 bn) and revenue from operations increased 15.9 per cent to Rs 24,648.20 crore (Rs 246.482 bn). The board approval is expected to complement internal cash flows as the company advances its expansion programme.

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Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

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Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.

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