Cement Sector Faces Price Decline and Intense Competition in FY25

Cement prices have declined by 7% year-on-year in FY25 due to weak demand and increased competition. Large supply additions and consolidation in the cement sector are keeping the pricing environment weak. Despite improvements in Q4, overall performance of the industry remains subdued.

Cement prices experienced a significant downturn of around 7% year-on-year in April-January FY25, driven by weak demand and intensified competition from new supply additions, according to a report by ratings agency Ind-Ra.

Despite a sequential price increase since November 2024 due to revived construction activities post-monsoon, the year-on-year prices have remained low. Higher capacity additions, predicted to persist in Q4, continue to suppress pricing power, with FY25 expected to experience the biggest decline in cement prices in a decade.

Acquisitions have reshaped the cement sector, with major players such as UltraTech Cement enhancing their market share through strategic takeovers, further fueling the consolidation trend and pressuring smaller entities. However, the industry's overall performance is still expected to be subdued in FY25 due to earlier weak demand.

(With inputs from agencies.)