Record cement capacity additions likely to keep utilisation at 70-71 pc: Report

New Delhi, June 19 (SocialNews.XYZ) Capacity utilisation in India's cement industry is expected to remain stable at around 70-71 per cent in FY27, a report said on Friday.

While the cement industry is estimated to have grown around 6.5-7.5 per cent in FY26 and demand is expected to grow around 5 per cent in FY27, the pace of capacity creation is expected to keep utilisation levels broadly stable across the sector, the report from Equirus Securities said.

Higher capacity utilisation is expected in northern and central regions and relatively moderate levels in the south due to capacity overhang.

Industry capacity additions are projected at 42-44 MTPA in FY27, following 50-55 MTPA in FY26.

The report noted that demand remained resilient during the year, driven by robust construction activity, especially post-monsoon in H2FY26, supported by sustained momentum across housing and infrastructure segments.

The sector continues to benefit from rapid urbanisation, increasing housing demand and government-led investments in roads, metro rail projects, industrial corridors, ports and other infrastructure projects.

Leading cement producers are continuing to expand through both organic and inorganic routes as they position themselves for long-term demand growth.

The report suggested that the industry could increasingly move towards a phase where operational efficiency, utilisation improvement and return ratios become key differentiators. As fresh capacities come on stream across the sector, cement companies may focus on sweating existing assets and extracting efficiencies from recently commissioned facilities.

Long-term growth prospects for the cement sector remain favourable due to rising infrastructure spending, affordable housing initiatives, manufacturing investments, Smart Cities projects and the National Infrastructure Pipeline.

India's per-capita cement consumption remains significantly below the global average, providing further room for long-term growth.

With industry capacity additions likely to remain elevated over the near term, utilisation levels broadly stable, the operational efficiency and asset productivity becomes increasingly important across the sector, the report noted.

—IANS

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Source: IANS