Cement Sector Eyes Strong Rebound in FY26 on Government Push, Rural Demand

With a subdued FY25, India’s cement sector is looking forward to a robust FY26, driven by increased government infrastructure expenditure and revived rural housing demand. Large players are expecting high single-digit growth in cement offtake, with UltraTech Cement envisioning a sustainable 7–8% volume expansion.

Vinod Bahety, CEO of Adani Cement, said FY26 is poised to outperform the previous fiscal. “If you break down FY25, the first nine months were weak, but the March 2025 quarter showed a clear turnaround. That momentum is spilling into Q1 of FY26,” Bahety told analysts.

UltraTech Cement—India’s largest producer with over 25% of the market share, expects strong growth on a higher base. “We anticipate double-digit growth this year,” said CFO Atul Daga, citing strong fundamentals. The company alone controls over a quarter of India’s total installed capacity of 655 million tonnes.

The rebound comes after FY25 saw only 4% growth in sales well below the industry average due to erratic weather and slowed infrastructure activity ahead of the general elections.

A key driver for the optimism is the Centre’s increased capital expenditure of ₹11.21 lakh crore in FY26, up 10% year-on-year. Rural housing and infrastructure projects together account for nearly two-thirds of the country’s cement consumption, giving producers hope for a sharp pickup.

Industry leaders also see consolidation accelerating. The past year has seen notable acquisitions including India Cements, Penna Cement, Orient Cement, and Vadraj Cement.

“Consolidation will continue—both via acquisitions and organic growth as larger players expand capacity faster than smaller rivals,” said Puneet Dalmia, CEO of Dalmia Bharat.”In the coming two years, the industry’s capacity may be controlled by the top four companies up to 60%. “

India, second-largest cement market in the world, has experienced gradual growth in demand over the last few years. With infrastructure and housing at the heart of government priorities, FY26 could mark a concrete comeback for the sector.