Cement sector operating profit to rise 12-18% in FY26, says ICRA

India’s cement sector is set for robust growth in FY26, with operating profit expected to rise 12-18% to Rs. 900-950 (US$ 10.14-10.71) per metric tonne (MT), according to ratings agency ICRA. Strong demand from housing and infrastructure, better realisations, and stable input costs will drive the improvement. In FY25, the industry’s operating profit before interest, depreciation, tax, and amortisation (OPBIDTA) stood at Rs. 806 (US$ 9.08) per MT. Icra’s analysis covers major players such as ACC, Ambuja Cements, UltraTech Cement, Dalmia Bharat, and Shree Cement, representing 74% of industry capacity.
A recent Goods and Services Tax (GST) reduction on cement from 28% to 18% is expected to cut rural housing construction costs by up to 1%, supporting volume growth and capacity expansion. Average cement realisation is projected to rise 3-5% in FY26, while volumes grew 8.5% in the first five months despite early monsoons. Prices climbed 7.4% YoY, particularly in northern and eastern regions. Consumers could save Rs. 26-28 (US$ 0.29-0.32) per bag, with retail prices currently at Rs. 350-360 (US$ 3.94-4.06). Capacity additions are forecast to accelerate to 41-43 million metric tonnes per annum in FY26, led by the eastern region.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.