A report by Axis Securities projects sustained momentum in cement demand for FY26, backed by robust growth in the real estate market and government housing initiatives like the Pradhan Mantri Awas Yojana (PMAY). Large-scale construction under such schemes is expected to drive continuous demand for building materials, especially cement, which remains essential for housing infrastructure.

The report forecasts cement demand growth of 7 to 8 per cent in FY26, supported by the government’s focus on infrastructure development alongside ongoing real estate activities. Further reinforcement is anticipated from increased allocations to infrastructure and construction in the 2025-26 budget.

Despite a subdued performance in the first half of FY25, with year-on-year growth of only 2–3 per cent, the cement sector saw a strong recovery in the third and fourth quarters, expanding at a high single-digit pace. This positive trend is expected to continue into Q1 FY26, driven by rising government capital expenditure and revived construction activity.

For FY25 as a whole, the industry recorded overall growth between 4 and 5 per cent. Central government core sector data confirms an 8 per cent year-on-year increase in cement output during April-May 2025, propelled by strong infrastructure and construction activity.

Historically, the fourth and first quarters witness peak cement consumption due to favourable weather, heightened infrastructure spending, and a seasonal rise in real estate development.

Looking ahead, Axis Securities notes that while pricing may stay competitive amid increased supply and market rivalry, manufacturers are well positioned to benefit from sustained volume growth in FY26.