New Delhi- India’s cement industry is expected to maintain capacity utilisation levels of around 70-71 per cent in FY27, even as demand continues to grow, according to a report released by Equirus Securities on Friday.
The report estimates that the cement sector expanded by approximately 6.5-7.5 per cent in FY26, while demand is projected to rise by around 5 per cent in FY27. However, a rapid pace of capacity additions across the industry is likely to keep overall utilisation levels broadly unchanged.
Regional trends are expected to vary, with higher utilisation rates anticipated in northern and central India, while southern markets may continue to witness relatively lower utilisation due to excess capacity.
Industry-wide capacity additions are forecast at 42-44 million tonnes per annum (MTPA) in FY27, following a substantial 50-55 MTPA increase in FY26.
The report highlighted that cement demand remained strong throughout the year, supported by robust construction activity, particularly in the second half of FY26 after the monsoon season. Growth was driven by sustained momentum in both housing and infrastructure projects.
The sector continues to benefit from key structural factors, including rapid urbanisation, rising housing demand, and significant government investments in roads, metro rail networks, industrial corridors, ports, and other infrastructure developments.
Major cement manufacturers are actively expanding their footprints through both greenfield projects and acquisitions as they prepare for long-term demand growth.
According to the report, the industry may gradually shift its focus towards operational efficiency, better capacity utilisation, and improved return ratios as key performance indicators. With several new facilities becoming operational, companies are likely to prioritise maximising productivity from existing assets and enhancing efficiencies at recently commissioned plants.
The long-term outlook for the cement industry remains positive, supported by increasing infrastructure spending, affordable housing programmes, manufacturing expansion, Smart Cities initiatives, and the National Infrastructure Pipeline.
The report also noted that India’s per-capita cement consumption remains well below the global average, indicating significant potential for future growth.
While capacity creation is expected to remain elevated in the near term, stable utilisation levels mean that operational excellence and asset productivity will play an increasingly important role in determining industry leaders, the report concluded.
With inputs from IANS
