Indian cement sector sees 9 per cent year-on-year growth in May
India's cement sector recorded 39.6 million MT production in May 2025, marking 9% YoY growth. ICRA projects continued demand from housing and infrastructure, forecasting 6–7% growth in FY26 and improving operating margins across cement firms
New Delhi: The Indian cement sector reached 39.6 million metric tonnes (MT) in May, recorded a strong 9 per cent year-on-year (YoY) growth in volumes, according to a new report.
The positive trend continued in the first two months of FY26, with volumes rising 8 per cent YoY to 78.7 million MT, according to the report by ICRA. For FY2025, cement volumes grew by 6.3 per cent YoY, totalling 453.0 million MT.
ICRA projects a further 6-7 per cent growth in FY2026, with volumes expected to reach 480-485 million MT, driven by sustained demand from the housing and infrastructure sectors.
Average cement prices saw an 8 per cent YoY increase in May 2025, reaching Rs 360 per bag, while prices for the first two months of FY2026 were up 7 per cent YoY. ICRA anticipates an 80-150 basis points (bps) improvement in operating margins for its sample set of cement companies, rising to 16.3-17.0 per cent in FY2026.
The rating agency maintains a Stable outlook for the Indian cement sector, reflecting confidence in continued demand and favourable cost conditions. The sector’s resilience underscores its critical role in supporting India’s infrastructure and housing development.
The combined Index of Eight Core Industries (ICI) increased by 0.7 per cent in May compared to the same month last year, according to the Ministry of Commerce and Industry data. The production of cement, steel, coal, and refinery products recorded positive growth last month.
The final growth rate of the Index of Eight Core Industries for February, March and April was observed at 3.4, 4.5 and 1.0 per cent, respectively, said the ministry. Cement production rose by 9.2 per cent in May. Its cumulative index increased by 7.8 per cent during April to May, 2025-26 over the corresponding period of the previous year.
