Cement Growth Forecast: 7-8% in FY27, ICRA Report

New Delhi, Apr 1 (PTI) The cement industry is expected to grow by 7- 8 per cent in the current fiscal year, supported by sustained demand from housing and infrastructure sectors, a report by rating agency ICRA said.

Profitability, however, will remain under pressure due to rising input costs and geopolitical tensions affecting fuel and freight.

In 2025-26 up to February, the cement industry posted a 9.2 per cent year-on-year increase in volumes, it added.

According to ICRA, the cement industry witnessed healthy expansion in profits in the previous fiscal, following an 11-17 per cent expansion in OPBIDTA/MT (operating profits per unit of sales volumes) to Rs 900-950 per MT (metric tonnes).


"The operating environment is now expected to moderate in FY2027 due to cost pressures," it said.

The cement sector is also expected to face pressure on operating profitability in H1 FY2027 amid higher input costs, primarily fuel (petcoke and coal) and freight (diesel) amid ongoing geopolitical tensions in West Asia, it said.

ICRA added that profitability is expected to moderate in FY2027. OPBIDTA/MT for FY2027 is expected to moderate by 6-11 per cent to Rs 820-870, while rising costs may prompt some price increase, but the same is likely to remain limited to 2-4 per cent in FY2027 owing to constrained pricing flexibility.

"Despite margin moderation and incremental debt requirements arising from ongoing capacity additions, credit metrics are expected to remain comfortable, supported by robust demand conditions," it said.