ICRA Limited (ICRA) has projected that cement volumes in India will expand by seven to eight per cent in FY2027, reflecting a recovery in demand after a period of moderation. The agency has attributed the outlook to healthy momentum in infrastructure spending and stronger traction in residential demand in key urban and semi urban markets. The forecast anticipates a gradual normalisation of inventory levels across trade channels.

The projection is expected to be supported by sustained allocations for roads, rail and urban infrastructure, alongside a pickup in housing completions that is likely to sustain offtake. Private investment is understood to be firming on the back of easing supply chain bottlenecks and improved contractor confidence. Analysts point to steady public expenditure on capital projects as a key demand pillar.

On the supply side, incremental capacity additions are likely to be met with commensurate absorption given the demand recovery, which should prevent sharp declines in utilisation. Input cost trajectories, particularly energy and freight, will remain an important determinant of margins and pricing dynamics for manufacturers. The agency expects a moderate recovery in realisations even as competition persists across regions. Analysts expect regional demand differentials to narrow over the year, which should support more balanced national absorption and steady pricing across major markets.

Risks to the outlook include adverse weather, a sharper slowdown in economic activity and policy slippage that could defer project execution or curb housing demand. Interest rate trends and liquidity conditions are also cited as variables that could influence residential offtake and developer activity. Nevertheless, the medium term outlook for the sector is viewed as constructive if fiscal impetus and project execution remain on course. Market participants are advised to monitor project awards and inventory trends for near term signals.