India’s Cement Industry Posts 9% Volume Growth in May 2025; Prices Rise 8%: ICRA

India’s cement sector is witnessing a robust rebound, with the industry recording a 9% year-on-year (YoY) increase in cement volumes in May 2025, reaching 39.6 million metric tonnes (MT), according to a recent report by credit rating agency ICRA.

The report also highlighted that average cement prices rose by 8% YoY during the month to ₹360 per 50-kg bag, indicating a reversal of last year’s pricing pressures. In the first two months of FY26 (April and May), cement prices have averaged ₹360 per bag, up 7% from the same period in FY25, when prices had slumped by 7% to ₹340 per bag.

Volume Growth Driven by Housing and Infrastructure

Cement demand remained steady across the first two months of the financial year. Cumulative dispatches for April and May 2025 reached 78.7 million MT, marking an 8% YoY increase, compared to 6.3% growth in FY25, when annual dispatches stood at 453 million MT.

ICRA projects that cement volumes will grow by 6-7% YoY in FY26, reaching 480–485 million MT, supported by sustained demand from the residential housing sector and continued momentum in infrastructure development.

“The outlook remains positive, with key drivers being public and private sector infrastructure spending and real estate revival,” the report noted.

Price Recovery and Cost Efficiencies to Boost Margins

ICRA also expects operating margins of cement companies in its sample set to improve by 80 to 150 basis points, reaching 16.3% to 17.0% in FY26. This improvement will be led by price recovery, along with a favourable cost environment, especially on the fuel front.

Fuel Cost Trends Support Profitability

Fuel and energy costs, which form a major part of input expenses, remained relatively benign in recent months:

• Coal prices in June 2025 were down 19% YoY to $100/MT

• Petcoke prices dipped 2% YoY to ₹10,880/MT

• Diesel prices held steady at ₹88 per litre

For Q1 FY26:

• Coal prices were 6% lower YoY

• Petcoke prices increased slightly by 1%

• Diesel prices remained flat

This easing in input costs is expected to provide additional support to cement manufacturers' margins in the current fiscal.

Industry Capacity and Outlook

According to the Cement Manufacturers’ Association (CMA), India’s installed cement production capacity stands at 690 million MT. With infrastructure projects such as highways, smart cities, and affordable housing gaining traction, the cement industry is well-positioned for a growth-oriented FY26.

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