Cement Sector Growth Slows Down

02 Dec 2024 CW Team

Key Drivers and Challenges

Muted Volumes: Cement volumes grew just 2% YoY to 212 MT in H1 FY25, impacted by election-related slowdowns and heavy monsoon rains. Rural Demand: A robust rabi season backed by healthy monsoons and strong farm cash flows is expected to improve rural housing demand in H2. Urban and Infrastructure Boost: Urban housing demand remains strong, while increased government capital spending in H2 FY25 (from ?4 lakh crore in H1 to meet a full-year target of ?11.1 lakh crore) should spur infrastructure activity and cement demand. Pricing and Margins

Cement prices fell 10% YoY to ?330 per bag in H1 FY25 due to oversupply and subdued demand, affecting revenue realisation. Operating profit margins dropped to 12% in Q2 FY25, a 375 bps decline YoY, despite reduced coal and pet coke costs (down 38% and 13% YoY, respectively). Capacity Expansion

The industry is expected to add 70-75 MT capacity during FY25-26, with 33-37 MT as clinker capacity. Regional Growth: Eastern and southern regions will lead capacity additions, contributing 38-40 MT evenly split over two years. Utilisation: Capacity utilisation is projected to rise slightly to 71% in FY25 from 70% in FY24. Outlook The cement sector is poised for a recovery in H2 FY25, driven by rural and urban housing demand and higher government spending. However, pricing pressures and oversupply remain challenges. Total installed capacity stands at 690 MT, with moderate utilisation rates indicating room for demand-driven growth.

The Indian cement industry's growth forecast for FY25 has been revised down to 4-5% (445-450 MT), primarily due to sluggish construction activity in the housing and infrastructure sectors, according to ICRA. The initial estimate in July was 7-8%, expecting demand to rise in H2, but a slower-than-expected post-election recovery has affected projections. Key Drivers and Challenges Muted Volumes: Cement volumes grew just 2% YoY to 212 MT in H1 FY25, impacted by election-related slowdowns and heavy monsoon rains. Rural Demand: A robust rabi season backed by healthy monsoons and strong farm cash flows is expected to improve rural housing demand in H2. Urban and Infrastructure Boost: Urban housing demand remains strong, while increased government capital spending in H2 FY25 (from ?4 lakh crore in H1 to meet a full-year target of ?11.1 lakh crore) should spur infrastructure activity and cement demand. Pricing and Margins Cement prices fell 10% YoY to ?330 per bag in H1 FY25 due to oversupply and subdued demand, affecting revenue realisation. Operating profit margins dropped to 12% in Q2 FY25, a 375 bps decline YoY, despite reduced coal and pet coke costs (down 38% and 13% YoY, respectively). Capacity Expansion The industry is expected to add 70-75 MT capacity during FY25-26, with 33-37 MT as clinker capacity. Regional Growth: Eastern and southern regions will lead capacity additions, contributing 38-40 MT evenly split over two years. Utilisation: Capacity utilisation is projected to rise slightly to 71% in FY25 from 70% in FY24. Outlook The cement sector is poised for a recovery in H2 FY25, driven by rural and urban housing demand and higher government spending. However, pricing pressures and oversupply remain challenges. Total installed capacity stands at 690 MT, with moderate utilisation rates indicating room for demand-driven growth.

Infrastructure Urban

10 Mar 2026

ABB to Invest Rs 6.25 Billion to Expand India Manufacturing

ABB recently announced plans to invest approximately Rs 6.25 billion ($75 million) in India during 2026 to expand its manufacturing footprint and research and development capabilities. The investment follows more than $35 million spent in 2025 and reflects the company’s continued focus on strengthening its ‘local-for-local’ strategy in the country.The investment will support ABB’s Electrification, Motion and Automation businesses and expand manufacturing capacity for infrastructure sectors such as renewable energy, metro rail, data centres and industrial applications. Approximately 300..

Equipment

10 Mar 2026

Six WOLFF Cranes Handle 60,000 m³ Concrete for German Hospital

Six WOLFF tower cranes are playing a key role in constructing a new hospital complex in Memmingen, Germany, supporting large-scale material handling for the project. The facility is being built on a 7.7-hectare site and will feature six floors, around 480 beds and a gross floor area exceeding 75,000 sq m.Building shell works began recently in February 2025. One WOLFF 6531.12 Cross crane supported early site preparation before being dismantled in autumn 2025, while five remaining cranes continue operations. Over an average deployment period of 16 months, the cranes are expected to move approxim..

Equipment

10 Mar 2026

REC Funds Rs 115.6 Million CSR Support for Bihar Eye Hospital

REC recently committed Rs 115.6 million under its Corporate Social Responsibility (CSR) programme for the procurement of clinical and non-clinical equipment at Sankara Eye Hospital in Saharsa, Bihar. The initiative aims to strengthen healthcare infrastructure and improve access to specialised eye care services in the region.A Memorandum of Agreement (MoA) was recently signed between Pradeep Fellows, Executive Director (CSR), REC Limited, and Wg Cdr V. Shankar (Retd), Trustee and Executive Director of Sankara Eye Hospital, at the REC office in the SCOPE Complex, New Delhi.The support is expecte..