Cement demand in India is expected to remain strong in FY26, supported by growing real estate activity and government housing programs like the Pradhan Mantri Awas Yojana (PMAY), according to a report by Axis Securities.
The report says cement demand could grow by 7-8% this year, thanks to more construction and infrastructure development across the country.
News agency noted that large-scale construction under various government initiatives is pushing up demand for building materials—especially cement, which is key to both housing and infrastructure.
The real estate market is growing, and with strong government support through housing schemes like PMAY, this demand for cement is expected to keep rising.
Although the cement industry had a slow start in the first quarter of FY25, with only 2-3% growth, things improved later in the year. Cement demand picked up in Q3 and Q4 of FY25, and this growth is likely to continue in Q1FY26, thanks to increased government spending and more real estate activity during the summer construction season.
Data from the central government shows that cement output went up by 8% year-on-year in April-May 2025.
In May 2025, India’s cement industry saw 9% growth, reaching 39.6 million metric tonnes (MT). Combined cement dispatches in April and May were 78.7 million MT, up 8% year-on-year. Ratings agency ICRA predicts full-year volumes in FY26 to be 480-485 million MT, compared to 453 million MT in FY25.
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Cement prices are also rising. In May, the average price increased by 8% year-on-year to Rs 360 per 50-kg bag, after a price drop last year. This price rise, along with lower input costs, is expected to boost company profits. ICRA estimates operating margins for cement companies could increase to 16.3%–17.0% in FY26.
Costs are coming down too. In June 2025, coal prices fell by 19% to $100/MT, petcoke dropped by 2% to Rs 10,880/MT, and diesel prices stayed steady at Rs 88 per litre.
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Even though competition in the industry may limit how much companies can raise prices, Axis Securities believes that strong growth in the real estate and infrastructure sectors will help cement companies grow their sales volumes and profits.
