India’s cement sector has entered 2025 with improving demand and utilisation remaining around 60 percent. Most companies are growing steadily, but UltraTech and Adani are pulling ahead with faster expansion, better cost management, and sharper execution.
India is the world’s second-largest cement producer, accounting for over 8 percent of global installed capacity, with nearly 98 percent of production controlled by the private sector. The top 20 players contribute roughly 70 percent of output, supported by extensive limestone reserves. In FY25, cement production rose 6.3 percent year-on-year to 453 million tonnes. Early FY26 data show an 8.9 percent rise, with July alone recording an 11.7 percent increase, driven by private majors like UltraTech and Adani. Prices increased 8 percent year-on-year, with southern markets seeing a Rs. 10 per bag hike in August despite monsoon conditions.
Policy changes such as the September 2025 GST overhaul are expected to reduce cement prices by Rs. 30–35 per 50-kg bag, supporting demand. Port-handled cement freight rose to 2.98 MMT in April–July 2025 from 2.22 MMT the previous year. Cement consumption, which stood at 445 MMT in FY24, is projected to reach 450.78 MMT by FY27 and 670 MMT by 2030, with demand growth of 4–5 percent in FY25 and 6–7 percent in FY26, aided by housing schemes, infrastructure spending, and state budget increases. Rural housing accounts for 32–34 percent of consumption, while urban housing demand is growing under PMAY-Urban.
Exports of cement, clinker, and asbestos products reached Rs. 5,845 crore in FY25, while imports were Rs. 1,543 crore. Coastal plants provide logistical advantages, positioning India to become a major exporter to the Middle East, Africa, and other developing markets.
The cement industry is characterised by low brand loyalty, cyclical demand, and highly localised markets. Pricing is largely driven by competition and local freight costs, with production costs dominated by limestone and clay (19 percent), power and fuel (31 percent), freight (26 percent), and other expenses (24 percent). Demand cycles with housing, road, and infrastructure activity, and seasonal patterns further affect revenues. Regional demand varies, with the East and North-East showing the fastest growth due to rural housing deficits and infrastructure projects, while other regions maintain steady growth supported by metro, road, and smart city projects.
Cement types vary, including OPC for general construction, PPC blended with fly ash for durability and cost efficiency, PSC using steel by-products to reduce heat and cracking, and Composite Cement combining multiple materials for strength and sustainability. Cost variations are largely due to clinker, the most expensive input requiring high fuel consumption.
Adani and UltraTech are outperforming peers due to their cost advantage. With limited pricing power in the industry, maintaining the lowest production costs is critical. They de-risk energy through captive power, green energy, and waste heat recovery, giving them structural cost advantages. Renewable energy, cheaper than grid power, now accounts for 35 percent of consumption and is projected to reach 50 percent by FY27. Controlling energy and logistics costs allows them to outperform even without higher demand.
Capacity utilisation is another differentiator. UltraTech has expanded capacity at twice the industry pace, with a 10 percent CAGR from FY14–FY24 and plans to reach 200 MTPA by FY27 through acquisitions and organic growth, achieving utilisation of 86–87 percent. Adani Cements, including Ambuja, ACC, and others, currently has 107 MTPA and aims for 155 MTPA by FY28. Rapid expansion and acquisitions enable both companies to scale faster than rivals relying primarily on organic growth.
Geography also gives them an edge. Locating clinker plants near limestone mines and grinding units near urban markets reduces freight costs and ensures timely supply. Proximity to raw materials and high-demand cities like Mumbai, Bengaluru, and Hyderabad enables them to serve large infrastructure projects efficiently. Regional diversification and optimized plant placement lower costs, mitigate local risks, and create barriers for competitors, reinforcing their leadership in India’s cement industry.
