India’s Cement Industry Posts 9% Volume Growth In May 2025; Price Hikes Aid Margins

India’s cement industry registered robust growth in May 2025, with volumes rising 9% year-on-year to reach 39.6 million metric tonnes (MT), according to a report released by rating agency ICRA.

This growth was accompanied by an 8% increase in average cement prices, which climbed to ₹360 per 50-kg bag.

The report highlighted that prices in the first two months of FY26 averaged ₹360 per bag — a 7% rise compared to the same period last year.

This follows a 7% price dip in FY25, during which average rates dropped to ₹340 per bag.

Sustained demand from the housing and infrastructure sectors played a key role in driving this growth.

In April and May 2025, cumulative cement dispatches stood at 78.7 million MT, reflecting an 8% year-on-year increase.

This compares favourably with the 6.3% growth recorded across FY25, when total annual dispatches touched 453 million MT.

“ICRA expects cement volumes to grow by 6–7% YoY in FY26, reaching 480–485 million MT,” the report stated, underlining strong demand fundamentals across core construction sectors.

Improved margins on the horizon

ICRA’s analysis projects that operating margins for a sample set of companies will improve by 80–150 basis points in FY26, potentially reaching 16.3–17.0%.

This is attributed to a combination of higher cement prices and a favourable cost environment.

Input costs have largely stabilised, aiding profitability. “Coal prices in June 2025 were down 19% YoY to $100 per MT, and petcoke prices declined 2% YoY to ₹10,880 per MT,” the report noted.

Diesel prices also remained unchanged at ₹88 per litre.

For the first quarter of FY26, coal prices were 6% lower year-on-year, while petcoke saw a marginal 1% increase.

According to the Cement Manufacturers’ Association (CMA), India’s total installed cement production capacity currently stands at 690 million metric tonnes.

The existing capacity and improved utilisation rates are expected to support the sector’s growth targets in the coming quarters.

With price stability, cost moderation, and resilient sectoral demand, India’s cement industry appears well-positioned for sustained growth in FY26.

The outlook remains optimistic, supported by robust housing development and a government-led infrastructure push.

As economic activity continues to expand, the cement sector is set to remain a key pillar of India’s construction and development ecosystem.

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