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• Cement companies expect industry growth of 7–8 per cent in FY27, driven by infrastructure spending, housing demand and urbanisation
• Firms including UltraTech Cement, Ambuja Cements, Shree Cement, Dalmia Bharat and Nuvoco Vistas remain optimistic on medium-term demand outlook
• Sector faces near-term headwinds from higher fuel costs, freight expenses and geopolitical tensions in West Asia impacting margins
• Companies step up capital expenditure and focus on premiumisation to offset cost pressures and improve realisations
Cement manufacturers expect the industry to grow in the range of 7–8 per cent in FY27, supported by sustained government capital expenditure, housing demand and accelerating urbanisation, even as they caution against near-term cost pressures linked to rising fuel prices and global geopolitical tensions. Advertisement
Top executives from companies such as UltraTech Cement, Ambuja Cements, Shree Cement, Dalmia Bharat and Nuvoco Vistas Corporation indicated in recent earnings calls that the medium-term outlook for the sector remains positive, with demand expected to be driven by infrastructure execution, affordable housing schemes and rural consumption.
However, the industry is grappling with elevated input costs, particularly fuel, freight and packaging materials, which account for a significant share of operating expenses. Executives noted that power, fuel and selling costs together constitute around 50–55 per cent of total operating costs for cement producers, making the sector sensitive to global crude price movements.
UltraTech Cement highlighted that geopolitical uncertainty in West Asia has resulted in higher fuel costs and supply chain disruptions, particularly in import-dependent segments. The company’s chief financial officer noted that elevated crude prices could also transmit inflationary pressure to domestic fuel rates, impacting overall cost structures.
Despite these headwinds, UltraTech maintained that India’s long-term demand story remains intact, supported by government-led infrastructure development, strong housing activity and continued urbanisation. The company indicated expectations of sustainable cement volume growth of around 7–8 per cent annually, with a focus on strengthening trade mix and premium product offerings.
At Ambuja Cements, management projected consolidated volumes to grow about 8 per cent in FY27, targeting around 80 million tonnes. The company said it is increasingly focusing on value-driven growth through premium cement and higher trade sales, even as industry-wide growth is expected to remain moderate at 5–5.5 percent amid inflationary pressures and monsoon-related risks.
Companies across the sector are also intensifying capital expenditure programmes to expand capacity and strengthen market positioning. UltraTech Cement indicated continued annual capital expenditure in the range of INR 8,000–10,000 crore over the coming years. Ambuja Cements plans moderate capex of INR 6,000–6,500 crore in FY27, while Dalmia Bharat has outlined investments of INR 3,200–3,400 crore.
Nuvoco Vistas Corporation flagged risks from volatile input costs, currency fluctuations and geopolitical uncertainty, warning that margins could remain under pressure in the near term. However, it also projected industry growth of 7–9 per cent over the coming year, underpinned by continued infrastructure investment and government spending.
Shree Cement noted that external factors such as geopolitical tensions and a weaker monsoon forecast could temporarily impact momentum, although domestic demand fundamentals remain resilient due to sustained policy support for infrastructure-led growth.
Across the sector, companies are increasingly relying on premiumisation strategies and improved sales realisations to offset cost pressures, with executives indicating that pricing stability combined with better product mix is supporting revenue growth even in a cost-volatile environment.
Source PTI
5th Jun, 2025
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