Indian Cement Industry: A Strategic Expansion Amidst Booming Demand

The Indian cement industry is set to expand its grinding capacity by 160-170 million tonnes between FY26 and FY28, investing Rs 1.2 lakh crore. Driven by robust demand and high capacity utilization, the expansion involves significant brownfield projects, which will stabilize financial leverage and credit profiles.

The Indian cement industry is poised for substantial growth, with plans to add 160-170 million tonnes of grinding capacity between FY26 and FY28, according to a report by Crisil Ratings. This expansion, supported by Rs 1.2 lakh crore in capital expenditure, marks a significant increase from previous years.

The planned capacity expansion is driven by strong demand and efficient capacity utilization, with 65% of new capacity coming from brownfield projects. This approach allows shorter construction periods and reduced costs, contributing to the industry's financial stability.

Despite substantial capital investment, the expansion's financial risks are mitigated by robust operating cash flows and stable credit profiles. As big players further consolidate the sector, the growth outlook remains positive, supported by investments in green energy and cost efficiency projects.

(With inputs from agencies.)