Growth in cement volumes expected to moderate to 4-5% in FY2025: ICRA
ICRA. This marks a notable adjustment from the earlier projection of 7-8% growth made in July 2024. The revision reflects a slower-than-expected recovery in construction activity across the housing and infrastructure sectors post-General Elections.
The muted growth trend was evident in the first half of FY2025 (H1 FY2025), where cement volumes increased by only 2% YoY to 212 million MT. Election-related disruptions in Q1 FY2025 and heavy monsoon rains in Q2 FY2025 were significant contributors to this slowdown. However, the industry is optimistic about a stronger second half (H2 FY2025), driven by an anticipated boost in rural and urban housing demand, alongside a pick-up in infrastructure spending.
“The operating performance of the cement companies to improve from Q3 FY2025 onwards, supported by the likely price hikes, uptick in cement volumes aided by increased Government spending on infrastructure projects, pick-up in construction activities, and stable input cost pressures – primarily pertaining to power and fuel,” said Tushar Bharambe, Assistant Vice President and Sector Head, Corporate Ratings, ICRA.
ICRA’s analysis highlights several factors expected to support rural housing demand in H2 FY2025, including improved farm cash flows from a robust monsoon season, strong kharif output, and high reservoir levels benefiting rabi crop sowing. In urban areas, sustained demand for housing is likely to complement this growth.
The infrastructure segment is also expected to rebound. While the Government of India’s
