Despite subdued private capital expenditure, India’s nine leading cement manufacturers are set to invest a combined Rs 305 billion in FY26, banking on a surge in demand led by increased government infrastructure spending.

UltraTech Cement, part of the Aditya Birla Group, and Adani Group’s Ambuja Cement and ACC, each plan capital investments of Rs 90 billion, topping the industry’s capex chart. Dalmia Bharat and Shree Cement are expected to invest Rs 35 billion and Rs 30 billion, respectively.

UltraTech, India’s largest cement producer, added 44 million tonnes per annum (MTPA) in capacity in the previous fiscal, reaching 184 MTPA, through both acquisitions (India Cements, Kesoram Industries) and organic growth. The company aims to add another 21 MTPA by FY27, targeting a total capacity of 211 MTPA.

The Adani Group, following its consolidation with Orient Cement, has surpassed 100 MTPA in combined capacity across Ambuja and ACC. The group plans to add 18 MTPA in FY26, aiming for 140 MTPA by FY28. Around Rs 60 billion will go into growth capex, with an additional Rs 25–30 billion allocated to efficiency improvements.

Dalmia Bharat, which expanded capacity by 2.9 MTPA last year, plans to invest Rs 35 billion, including Rs 1 billion for renewable energy. It has already announced a 6 MTPA capacity addition in Maharashtra and Karnataka for Rs 35 billion, and aims to raise its clinker capacity from 23.5 MTPA to 30.7 MTPA by FY27.

However, analysts warn that rising capex amidst uncertain demand could lead to overcapacity and pricing challenges. Pranav Mehta, Research Analyst at Equirus Securities, noted that sluggish demand recovery and capacity overhang may impact pricing discipline across the industry.

Ashutosh Murarka of Choice Broking added that prices may face downward pressure as 50–60 MTPA of new capacity comes online, with the eastern and southern regions particularly vulnerable due to low utilisation rates of 62–65 per cent and below 60 per cent, respectively.

Still, optimism remains for demand revival from the real estate sector, bolstered by the RBI’s recent interest rate cut, which could support cement consumption in the medium term.