Leading cement manufacturers are projecting healthy industry growth of 7-8 per cent in FY27, supported by strong government infrastructure spending, rising housing demand, and rapid urbanisation, despite short-term pressures from increasing fuel costs linked to the West Asia crisis.
Senior executives from companies including UltraTech Cement, Ambuja Cements, Shree Cement, Dalmia Bharat, and Nuvoco Vistas expressed confidence during recent earnings calls about medium-term demand prospects. They expect industry growth to remain in the 7-8 per cent range while relying on premiumisation strategies and improved product realisations to offset cost pressures.
Cement producers are also significantly increasing capital expenditure plans for FY27, betting on sustained infrastructure expansion and robust housing activity despite near-term economic uncertainties. UltraTech noted that the sector is currently facing pressure from rising fuel prices, higher freight costs, and disruptions in import-dependent supply chains due to geopolitical tensions in West Asia.
“It is a real headwind on fuel costs, packing bags, freight, and certain import-dependent supply chains, besides impacting near-term sentiment in some demand segments,” said UltraTech Chief Financial Officer Atul Daga. He also warned that elevated crude oil prices could eventually push up domestic petrol and diesel rates.
Power, fuel, and selling expenses account for nearly 50-55 per cent of the operating costs for cement manufacturers, making the sector highly sensitive to energy price fluctuations. Despite these challenges, Daga maintained that India’s long-term growth trajectory remains strong, driven by government capital expenditure, infrastructure execution, and sustained housing demand.
“We are targeting double-digit growth,” he said, while forecasting sustainable annual cement volume growth of 7-8 per cent, supported by urbanisation, affordable housing schemes, and improving rural demand. Vinod Bahety projected consolidated cement volumes for FY27 to grow by around 8 per cent to nearly 80 million tonnes, with the company increasing focus on trade sales and premium products.
At the broader industry level, Bahety expects growth to remain relatively moderate at around 5-5.5 per cent due to inflationary pressures and concerns regarding a weak monsoon. However, he anticipates stronger expansion of around 8 per cent for the Adani Group’s cement business.
“On our overall consolidated volumes, we expect growth of nearly 8 per cent in FY27 to around 80 million tonnes. We are also consciously focusing on value creation through trade volumes and premium cement,” he said.
Executives across the industry also highlighted that premiumisation and a better trade mix are helping cement makers improve sales realisations even in a stable pricing environment. UltraTech stated that grey cement prices strengthened by approximately 2.5 per cent across most regions during the quarter, aided by premiumisation and an improved trade mix, thereby boosting realisations.
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Puneet Dalmia said the company would continue pursuing aggressive premiumisation strategies in FY27, as both higher volumes and improved pricing supported revenue growth. “Although our realisations appear largely flat, they actually improved by nearly 1.7 per cent on a quarter-on-quarter basis,” he said.
Neeraj Akhoury observed that geopolitical tensions in the Middle East and predictions of a moderate monsoon may temporarily affect the sector’s momentum, though domestic demand fundamentals continue to remain resilient.
“India’s macroeconomic environment remains strong, backed by stable domestic demand and continued policy emphasis on infrastructure-led growth,” he said. Jayakumar Krishnaswamy also highlighted risks arising from geopolitical uncertainty, rising fuel prices, currency volatility, and increasing raw material costs, particularly packaging materials. He cautioned that profit margins could remain under pressure for the next one or two quarters.
However, he added that continued infrastructure investments and government spending continue to support optimism, with the industry likely to grow by 7-9 per cent in the coming year. The Nirma Group-backed company has earmarked Rs 900 crore as capex for FY27 and Rs 960 crore for FY28, reflecting its expansion strategy over the next two years.
Dalmia Bharat has announced a capital expenditure plan of Rs 3,200-3,400 crore for FY27 as it continues to invest in expansion and premiumisation initiatives. UltraTech, the flagship cement company of the Aditya Birla Group, said it plans to continue investing around Rs 10,000 crore annually over the next four to five years.
“We see investments of approximately Rs 8,000-10,000 crore every year for the foreseeable future. Our future capex pipeline remains fully funded and the growth outlook remains intact,” Daga said.
Meanwhile, Adani Group-owned Ambuja Cements plans to keep FY27 capital expenditure relatively moderate at around Rs 6,000-6,500 crore compared to Rs 7,500 crore in the previous year, as the company focuses more on completing ongoing projects rather than launching major new expansions.
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