Indian cement sector outlook improves; both demand and prices expected to rise

New Delhi: According to a survey by Nuvama Research, the prognosis for the cement industry in India is improving as both demand and pricing are anticipated to increase in the following months. According to the analysis, a low base in FY25 and improved demand circumstances in the future might be advantageous for the industry.

It said, “We believe the outlook for the cement space is improving as both volumes and prices are likely to log an uptick going ahead, aided by a low base of FY25E.”

All areas had a rise in cement prices in May 2025, with the southern region setting the pace, followed by the eastern, central, and western markets. An improvement in demand was the primary driver of this price increase.

Dealers anticipate a partial reverse of the current price rises by the end of May, the article said. Both the federal and state governments have raised capital expenditures (capex) to support the improvement in demand.

Despite a 12% year-over-year decline in the first eight months of FY25, central government capital expenditures rebounded and increased by 8% for the whole fiscal year.

Likewise, in FY25, state government capital expenditures increased by 9%. The demand for cement is anticipated to be further supported by the increased capital investment that many significant states have planned for FY26.

According to the research, after a good fourth quarter of FY25, cement consumption was comparatively sluggish in April 2025. After being muted for the first nine months of FY25, capital investment increased dramatically in the last quarter.

Nonetheless, compared to prior years, capex growth was lower for the whole year. After growing by more than 20% in FY23 and FY24, central government capital expenditures only increased by around 8% in FY25. Additionally, state government capital expenditure growth decreased to 9% in FY25 from 27% in FY24.

According to data from eight important states, all save Maharashtra have increased their capital expenditure budgets for FY26, with percentages ranging from 12% to 69%.

In March 2025, the index of eight essential sectors saw a little rebound, increasing by almost 4% year over year, according to statistics from the Department for Promotion of Industry and Internal Trade (DPIIT). In contrast to other years, the increase is still modest.

In general, Nuvama Research anticipates that the cement industry will accelerate in the next quarters due to rising demand and more affordable prices.