India’s cement industry is poised for major consolidation and expansion, with the top 10 producers expected to add approximately 140 million metric tonnes per annum (MMTPA) of capacity by FY28, according to a new report by Moody’s Ratings. The report highlights that over ₹89,000 crore ($10.5 billion) worth of domestic capacity has already changed hands in the past five years as larger companies accelerate acquisitions of smaller regional players.
With current industry valuation at $16 billion, the cement sector is projected to grow at a compound annual growth rate (CAGR) of 19%, unlocking a $45 billion opportunity by the end of the decade. Key players like UltraTech Cement and Ambuja Cement are leading the charge in both organic and inorganic expansion, aiming to match India’s rapidly rising cement consumption.
Regional Focus and Consolidation Trends
The southern region of India, with over 200 MMTPA of installed capacity, remains the largest cement-producing zone, ahead of the northern and eastern regions, each with 150 MMTPA. South India, due to its fragmented market structure, is expected to see the highest consolidation activity. Smaller producers in this region are particularly vulnerable to acquisition due to lower capacity utilisation and profitability.
According to Moody’s, around 170 MMTPA of new capacity—nearly 85% of the projected expansion—is slated to come online by FY27–28. UltraTech and Ambuja alone will account for nearly 30% of this, while Shree Cement and Dalmia Bharat will together contribute another 25%. Meanwhile, companies like JK Cement, JSW Cement, and JK Lakshmi Cement are on track to nearly double their current capacities, jointly contributing around 35% of the upcoming additions.
India’s Cement Demand on a Steady Uptrend
India’s per capita cement consumption currently stands at 260 kg—less than half of the global average of 540 kg—indicating significant room for growth. Moody’s estimates that India’s cement demand will increase from 445 MMTPA in FY24 to around 670 MMTPA by 2030, driven by robust activity in housing (accounting for 55–60% of total consumption) and infrastructure (28–30%).
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This steady demand will necessitate an estimated 200 MMTPA increase in industry capacity, representing a 30% expansion over five years.
Risks from Raw Material Volatility
However, the report warns that volatility in raw material prices and regulatory changes could impact profitability. For instance, recent state-level levies on limestone mining—such as the ₹160 per tonne tax introduced in Tamil Nadu—pose a potential 15–20% dent in industry margins, currently averaging ₹800–₹900 per tonne.
Further compounding the risk is India’s reliance on imported coal and petcoke due to limited domestic availability, exposing the sector to global commodity price fluctuations.
Moody’s expects that ongoing consolidation, steady demand growth, and significant capacity additions will redefine India’s cement landscape over the next five years. With top players racing to expand market share and small players seeking stability through mergers, the sector is evolving rapidly to keep pace with the country’s infrastructure and housing boom.
