Source: The Economic Times
A new report titled Cement Sector Analysis by Axis Securities suggests that India’s cement demand will grow by 7-8% in the financial year 2025-26 (FY26). The report identified that strong growth in the real estate sector, supported by government housing schemes (like Pradhan Mantri Awas Yojana/PMAY) would be the major driver for cement demand.
The real estate sector has been steadily growing, with a focus and commitment by the government to continue with PMAY – an affordable housing scheme, ensuring sustained demand for cement products. The Union Budget for FY2025-26 is largely focused on infrastructure development, which will contribute to an increased cement consumption across the nation.
“The projected growth in the real estate market, coupled with the government’s major housing initiatives such as the Pradhan Mantri Awas Yojana (PMAY), is expected to sustain the momentum in cement demand,” the report added.
Performance in FY25
In the first quarter of FY25 (April–June 2024), cement demand expanded at a slow pace (only 2–3% year-on-year) due to extreme hot weather, elections, and excessive amounts of rainfall. Demand improved in the second half and especially did well in Q3 and Q4, when cement demand grew at a high single-digit rate.
Overall growth for the cement sector during FY25 was 4-5%, with the increase largely spurred by improved construction activity and the commencement of larger infrastructure projects.
The government data supports this upward trend with cement production increasing by 8% year-on-year in April and May 2025.
FY26 Expectations
Future indications have positive expectations in the first quarter of FY26. Seasonally, the fourth quarter (January–March) and then the first quarter (April–June) are peak seasons for cement use as project completion increases during improved weather conditions. Seasonal demand should remain positive this year.
Cement prices will likely remain under pressure from excess supply and strong competition from manufacturers. However, companies will still benefit from increased volumes.
“Looking ahead, the demand environment remains strong, and the positive trend is expected to continue in Q1FY26. While pricing may remain competitive due to heightened competition and incremental supply, cement manufacturers are likely to benefit from sustained volume growth,” the report added.
Key Highlights:
- Cement demand to grow 7–8% in FY26
- Growth supported by real estate activity and PMAY housing schemes
- Slow growth in Q1FY25, but strong recovery in Q3 and Q4
- 8% growth in cement output in April–May 2025
- Demand expected to remain high in early FY26
- Rising volume to help offset price pressures
- Increasing volumes to help counteract price pressures
India’s cement industry is projected to resume its ascent in FY26, with robust government support and a developing housing market.
