The agency forecasts a growth of approximately 6 to 7% for India’s cement industry in FY27, and anticipates a 6.5 to 7.5% growth in the current fiscal year, FY26.
Additionally, ICRA predicts that the industry will add 85-90 million MTPA in capacity during FY2026-FY2027, with operational EBITDA expected to range from ₹880-930 per Metric Ton (MT) in FY2027, driven by improved pricing and higher volume sales.
Read more: Outlook 2026: Cement sector faces demand test as pricing and supply risks loom
Cement demand has shown resilience, with volumes increasing by 8.5% in FY2026, supported by vigorous construction activities. With post-monsoon construction anticipated to accelerate, a sequential uptick in demand is expected in H2 FY2026,” the report noted.
Furthermore, GST reforms that reduced the duty on finished cement from 28% to 18%, along with enhanced government spending on infrastructure, are projected to strengthen demand momentum through FY2026 and FY2027.
Read more: Cement industry to record 9% volume growth in FY26: Crisil Intelligence
In light of favorable demand conditions, major cement manufacturers are expanding their capacities through both organic growth and acquisitions to enhance their market presence.
The report estimates that the industry will add 42-44 million MTPA in capacity in FY2027, following an addition of 43-45 million MTPA in FY2026.
Certain regions, particularly northern and central India, are expected to achieve higher capacity utilization than the national average of around 70%, while the southern region may see relatively modest utilization due to an excess in capacity.
Overall, the industry’s capacity utilization is projected to remain steady at 70-71% in FY2027, mirroring FY2026, based on the expanded capacity base, it added.
As per the Cement Manufacturers’ Association (CMA), the leading organization representing large cement companies, India’s installed cement capacity stands at 700 MTPA, making it the second-largest producer after China.
