India’s cement industry is poised for robust performance in FY26, with operating profit expected to increase 12-18% to $10.14–$10.71 per metric tonne, according to ratings agency ICRA. The growth is supported by strong demand from the housing and infrastructure sectors, improved realisations, and stable input costs. In FY25, the industry recorded an operating profit before interest, depreciation, tax, and amortisation (OPBIDTA) of $9.08 per metric tonne.
ICRA’s analysis includes major players such as ACC, Ambuja Cements, UltraTech Cement, Dalmia Bharat, and Shree Cement, which together account for roughly 74% of total industry capacity. A recent reduction in the Goods and Services Tax (GST) on cement from 28% to 18% is expected to lower rural housing construction costs by around 1%, further encouraging volume growth and capacity expansion.
Average cement realisations are forecast to rise 3-5% in FY26. Despite early monsoon disruptions, cement volumes increased 8.5% during the first five months of the fiscal year. Prices have risen 7.4% year-on-year, particularly in northern and eastern regions, providing relief to industry margins. Retail consumers are expected to save approximately $0.29–$0.32 per bag, with current prices ranging between $3.94 and $4.06 per bag.
Capacity additions in FY26 are projected to accelerate to 41–43 million metric tonnes per annum, driven primarily by expansion in eastern India. This expansion is aimed at meeting rising demand and supporting the sector’s long-term growth trajectory.
The combination of strong infrastructure and housing demand, supportive GST policy, moderate input costs, and strategic capacity increases positions India’s cement sector for a solid performance in FY26. Analysts expect that these developments will enhance profitability and maintain momentum in both domestic sales and investment in new capacities.
