Indian cement industry to add 80 mt cement capacity through FY24

17 Aug 2021 CW Team

With a healthy growth outlook, the cement industry is stepping up capacity additions, with 80 mt expected over the next three fiscal years, a quarter more than in the previous three fiscals 64 mt.

The top ten players will gain market share as they add 70% of new capacity. In addition, lower project risks and funding of this capital expenditure through internal accruals will help them maintain a strong credit profile.

Due to a resurgence in infrastructure and housing spending, cement demand is expected to increase by over 10% this fiscal year, after remaining flat the previous fiscal year. The government's increased focus on roads and railways, as well as the resumption of housing construction, will drive cement consumption higher this fiscal year.

Given the government's continued focus on infrastructure, the medium-term demand outlook is also positive (through the building of roads, metros and railways).

Nearly 68% of the 19.5 million affordable housing units targeted under PMAY-R have yet to be built (as of this fiscal year), and cement demand is expected to rise as these units are built over the next two to three fiscal years.

The capacity addition will be skewed, with nearly 45 to 47 mt added in the eastern and central regions, owing to these regions' strong demand scenarios and higher current utilisations of 72%.

In comparison, due to excess supply and lower utilisation levels of 54%, the south is only expected to add 6 to 7 mt.

Nearly 60% of the new capacity will be brownfield, meaning enhancements at the same location, lowering capital costs by 40 to 50% to Rs 4,100 to 4,600 per tonne and overall costs to around Rs 25,000 to 26,000 crore for the top ten players.

This will also result in better absorption of fixed costs such as manpower, common infrastructure, and overheads, as well as a reduction in the risks associated with land acquisition, regulatory approvals, and implementation.

By March 31, nearly Rs 5,500 to 5,600 crore had been spent out of the total budget. Internal cash accruals of at least Rs 50,000 crore are expected to be generated over the next three fiscal years to cover the shortfall.

These companies' Capex plans are also supported by sustained cash liquidity of more than Rs 30,000 crore as of March.

Overall, according to CRISIL, with no material increase in debt, these players' credit profiles will remain strong. Furthermore, by fiscal 2024, six of the top ten players are expected to be debt-free, compared to four at the end of fiscal 2021.

Image Source

Also read: Cement manufacturers eye expansion in eastern India

With a healthy growth outlook, the cement industry is stepping up capacity additions, with 80 mt expected over the next three fiscal years, a quarter more than in the previous three fiscals 64 mt. The top ten players will gain market share as they add 70% of new capacity. In addition, lower project risks and funding of this capital expenditure through internal accruals will help them maintain a strong credit profile. Due to a resurgence in infrastructure and housing spending, cement demand is expected to increase by over 10% this fiscal year, after remaining flat the previous fiscal year. The government's increased focus on roads and railways, as well as the resumption of housing construction, will drive cement consumption higher this fiscal year. Given the government's continued focus on infrastructure, the medium-term demand outlook is also positive (through the building of roads, metros and railways). Nearly 68% of the 19.5 million affordable housing units targeted under PMAY-R have yet to be built (as of this fiscal year), and cement demand is expected to rise as these units are built over the next two to three fiscal years. The capacity addition will be skewed, with nearly 45 to 47 mt added in the eastern and central regions, owing to these regions' strong demand scenarios and higher current utilisations of 72%. In comparison, due to excess supply and lower utilisation levels of 54%, the south is only expected to add 6 to 7 mt. Nearly 60% of the new capacity will be brownfield, meaning enhancements at the same location, lowering capital costs by 40 to 50% to Rs 4,100 to 4,600 per tonne and overall costs to around Rs 25,000 to 26,000 crore for the top ten players. This will also result in better absorption of fixed costs such as manpower, common infrastructure, and overheads, as well as a reduction in the risks associated with land acquisition, regulatory approvals, and implementation. By March 31, nearly Rs 5,500 to 5,600 crore had been spent out of the total budget. Internal cash accruals of at least Rs 50,000 crore are expected to be generated over the next three fiscal years to cover the shortfall. These companies' Capex plans are also supported by sustained cash liquidity of more than Rs 30,000 crore as of March. Overall, according to CRISIL, with no material increase in debt, these players' credit profiles will remain strong. Furthermore, by fiscal 2024, six of the top ten players are expected to be debt-free, compared to four at the end of fiscal 2021. Image Source Also read: Cement manufacturers eye expansion in eastern India

Technology

28 Oct 2025

Building Faster, Smarter, and Greener!

Backed by ULCCS’s century-old legacy, U-Sphere combines technology, modular design and sustainable practices to deliver faster and more efficient projects. In an interaction with CW, Rohit Prabhakar, Director - Business Development, shares how the company’s integrated model of ‘Speed-Build’, ‘Smart-Build’ and ‘Sustain-Build’ is redefining construction efficiency, quality and environmental responsibility in India.U-Sphere positions itself at the intersection of speed, sustainability and smart design. How does this translate into measurable efficiency on the ground?At U..

Infrastructure Transport

28 Oct 2025

Smart Roads, Smarter India

India’s infrastructure boom is not only about laying more kilometres of highways – it’s about building them smarter, safer and more sustainably. From drones mapping fragile Himalayan slopes to 3D machine-controlled graders reducing human error, technology is steadily reshaping the way projects are planned and executed. Yet, the journey towards digitisation remains complex, demanding not just capital but also coordination, training and vision.Until recently, engineers largely depended on Survey of India toposheets and traditional survey methods like total stations or DGPS to prepare detai..

Real Estate

28 Oct 2025

What Does DCPR 2034 Mean?

The Maharashtra government has eased approval norms for high-rise buildings under DCPR 2034, enabling the municipal commissioner to sanction projects up to 180 m on large plots. This change is expected to streamline approvals, reduce procedural delays and accelerate redevelopment, drawing reactions from developers, planners and industry experts about its implications for Mumbai’s vertical growth.Under the revised DCPR 2034 rules, buildings on plots of 2,000 sq m or more can now be approved up to 180 m by the municipal commissioner, provided structural and geotechnical reports are certified b..