Archive · 12 Nov 2025
India's Cement Industry to Expand Significantly by FY28
India's cement companies are planning a big building spree!
Over the next three years, they aim to increase their cement-making capacity by about 170 million tons.
This is much more than they added in the last few years.
They expect to need this extra capacity because many new buildings and roads are planned.
To do this, they will spend a lot of money, around 1.2 lakh crore rupees.
A big part of this expansion will be by adding to existing factories, which is usually faster and cheaper.
They also plan to build more factories that only grind cement, which is also simpler.
The good news is that they expect to pay for most of this with money they make from selling cement, so their debts shouldn't get too high.
This expansion should keep their factories running efficiently as demand for cement grows.
India's cement industry is set to add 160-170 million tonnes of grinding capacity between FY26 and FY28.
This expansion will require an estimated capital expenditure of Rs 1.2 lakh crore, a 50% increase from the previous three fiscals.
The growth is driven by a strong demand outlook and increased capacity utilization, which reached about 70% last fiscal.
Approximately 65% of the new capacity will be brownfield projects, aiming to reduce costs and implementation challenges.
Financial leverage for cement makers is expected to remain stable, with funding primarily sourced from operating cash flows.
- Who
- India's cement industry
- What
- Poised for significant expansion with 160-170 million tonnes of grinding capacity expected to be added between FY26 and FY28, requiring approximately Rs 1.2 lakh crore in capital expenditure.
- When
- Between FY26 and FY28
- Where
- India
- Why
- Driven by a strong demand outlook and high capacity utilization, with a focus on brownfield expansions and funded primarily by operating cash flows.
CRISIL's Outlook
Potential Near-Term Challenges
Capacity Expansion and Demand Balance
CRISIL's Outlook
CRISIL anticipates that the addition of 160-170 million tonnes of grinding capacity between FY26 and FY28 will be absorbed by a strong demand outlook, bringing capacity utilization back to around 70%.
Potential Near-Term Challenges
A significant commissioning of 70-75 MT in the current fiscal (FY26) could lead to a temporary imbalance between supply and demand, potentially moderating capacity utilization in the short term.
Capital Expenditure and Funding
CRISIL's Outlook
The industry is set to invest approximately Rs 1.2 lakh crore in capex, with the majority of this expansion funded from healthy operating cash flows, ensuring stable financial leverage and credit profiles.
Potential Near-Term Challenges
Despite brownfield projects and split grinding units aiming to reduce risks, the substantial capital expenditure and the scale of expansion may still present logistical and implementation hurdles.
- Report Agency
- CRISIL
- Projected Capacity Addition (FY26-28)
- 160-170 million tonnes (MT)
- Previous Capacity Addition (Past 3 Fiscals)
- 95 MT
- Projected Capital Expenditure (FY26-28)
- Approx. Rs 1.2 lakh crore
- Capacity Utilization (Last Fiscal)
- Approx. 70%
- Brownfield Expansion Proportion
- Approx. 65%
- Installation Capacity (March 31, 2025)
- 668 MT
Sources
Cement Prices Likely To Rise From January 2026 As Demand Rebounds: Report
Axis Direct picks UltraTech, Ambuja, Dalmia & JK Lakshmi as top cement stocks
India’s cement industry poised to expand by 170 million tonnes in next 3 fiscals
