Cement Sector Faces Growth and Profitability Challenges Amid Rising Costs

The cement industry is projected to grow by 7-8% in the current fiscal year due to strong demand from the housing and infrastructure sectors. Despite this growth, profitability is under pressure from rising input costs and geopolitical tensions affecting fuel and freight expenses. The fiscal year 2027 is likely to see moderated operating profits due to these challenges.

The cement industry is projected to see a growth of 7-8% in the current fiscal year, mainly driven by strong demand from housing and infrastructure projects, according to a report by rating agency ICRA.

However, the sector's profitability is under pressure due to escalating input costs and geopolitical tensions impacting fuel and freight expenses.

In fiscal year 2027, operating profits are expected to moderate due to these challenges, despite limited scope for any significant price increases, while credit metrics remain stable, fueled by robust demand.

(With inputs from agencies.)