The Indian cement industry is set to recover in 2025, fueled by increased government spending on large infrastructure projects and expected sales growth. Analysts forecast an 8% growth in sales driven by higher margins, improved demand, and the strategic acquisitions made by major players like UltraTech Cement and Adani Cement.
In 2024, over 50 MTPA of capacity was acquired by UltraTech Cement and Adani Cement for a combined value of USD 4.5 billion. Both companies are looking to expand further, with UltraTech maintaining its lead and Adani aiming to close the gap by reaching 140 MTPA by FY28.
The year 2024 was marked by major mergers and acquisitions, with Adani Cement acquiring companies like Sanghi Industries and Orient Cement, boosting its capacity to over 100 MTPA. UltraTech, also actively expanding, acquired India Cements and is in the process of acquiring Kesoram Industries’ Cement Business, strengthening its position as an industry leader.
Despite challenges like lower sales realization, slow volume growth, and underutilized capacity in 2024, experts predict that the cement industry will benefit from rising demand in housing and infrastructure sectors. Deloitte India’s Rakesh Surana noted that the cement sector is consolidating, with the top five producers now controlling around 60-65% of the overall market share.
However, the industry faced hurdles in FY24, including a slowdown due to election periods, weather disruptions, and increased labor shortages. As a result, cement growth decelerated to 4-5% in 2024. Prices fell 7% during this period, contributing to a decrease in revenues and a slight reduction in profit margins.
Despite these challenges, the outlook for 2025 remains optimistic, with projections indicating 4-5% growth in cement volumes, driven by robust demand in rural areas, urban housing, and infrastructure projects. Industry experts, including CRISIL’s Sehul Bhatt, and ICRA’s Tushar Bharambe, expect price stabilization and improved capacity utilization in the second half of FY25. The Indian cement sector is poised for transformation, with a focus on sustainability, innovation, and an improved market environment, offering strong growth prospects for 2025 and beyond.
