Cement Demand Set to Bounce Back with 7% Growth This Fiscal Year
India’s cement demand is expected to recover to 6.5-7.5% growth in 2024-25 after slowing to around 5% last year, according to a CRISIL report. Higher demand and rising prices will boost profitability for cement makers, pushing operating margins above the 10-year average.
Key Drivers of Growth:
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Rural housing demand (7-8% growth) will lead the recovery, supported by better farm incomes from a healthy monsoon, tax benefits, and stable inflation.
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Infrastructure projects (30% of demand) will grow at a slower but steady pace due to fewer new highway and railway projects.
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Cement prices have already risen in Q1 and may increase by 2-4% this year after two weak years.
Profitability Boost:
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Operating profits could rise to ₹975-1,000 per tonne (vs. ₹880 last year) due to better pricing and cost savings from green energy.
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Strong finances and stable credit profiles will help cement companies manage risks.
Risks to Watch:
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Heavy monsoon delays or lower infrastructure spending could slow demand.
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Global price shocks (fuel, raw materials) may hurt profits.
The report analyzed 17 major cement firms, covering 85% of India’s market.
