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Time of India
22-04-2025
- Business
- Time of India
Cement demand to rise 6.5-7.5% in FY26 on higher infra spending, rural housing boost: Report
New Delhi: Cement demand in India is expected to grow 6.5-7.5 per cent in the current fiscal, driven by a nearly 10 per cent rise in budgetary allocation for core infrastructure ministries and expectations of an above-normal monsoon supporting rural housing , according to Crisil Intelligence . In FY25, demand growth was moderate at 4.5-5.5 per cent due to a slow start to the year amid general elections, a well-distributed monsoon that impacted construction activity , and a high base from the previous three years. Additionally, weak state government spending and a sluggish real estate market affected project execution and urban housing. "Infrastructure, which accounts for 29-31 per cent of domestic cement demand, is expected to remain a key driver in FY26," said Sehul Bhatt, Director, Crisil Intelligence. 'Budgets of 12 states, accounting for 63-65 per cent of Indian cement demand, show an 11 per cent increase in total allocations. The government's focus on specialised rail corridors and tourism is expected to further bolster demand.' Rural housing is projected to continue dominating cement consumption with an estimated share of 32-34 per cent. A favourable monsoon is expected to increase agricultural profitability, supporting housing demand. Programmes such as PMGSY and MNREGA with increased allocations will also support rural demand. The Pradhan Mantri Awas Yojana – Gramin is expected to see a higher pace of execution due to increased sanctions and under-construction units. Rural wages, estimated to have increased 25 per cent in FY25, are expected to remain elevated. The urban housing segment, which faced challenges in FY25, is likely to improve this year due to a low base, possible interest rate cuts, and faster execution under the Pradhan Mantri Awas Yojana – Urban, which has seen a 45 per cent rise in allocation in the 2025-26 Union Budget. The industrial and commercial segment, which accounts for 13-15 per cent of cement demand, is expected to grow steadily, aided by commercial real estate and warehousing. The segment had slowed in FY25 due to moderation in private capex. 'A demand surge is anticipated across segments, driven by increased capex allocations for infrastructure and housing ministries,' said Sachidanand Choubey, Associate Director, Crisil Intelligence. 'This is expected to support a price rise in FY26, following a two-year lull. We estimate a 2-4 per cent price increase as companies focus on improving realisations.'
Time of India
22-04-2025
- Business
- Time of India
Cement demand may rise 6.5-7.5% in FY26: Crisil
NEW DELHI: The cement sector is expected to see a 6.5-7.5% demand growth in the financial year 2025-26, according to Crisil Ratings The demand is expected to be driven by a 10% rise in budgetary allocation for core infrastructure ministries and on expectation that an above-normal monsoon will boost agricultural profitability, in turn lifting rural housing demand . In FY25, cement demand growth was moderate at 4.5-5.5% owing to a sluggish start to the year because of the general elections, spatially well-distributed monsoon that impacted construction along with high base of past three fiscals. Weak state government spending in the first half also slowed pace of project execution and a slow real estate market impacted urban housing. Sehul Bhatt, director, Crisil Intelligence said, "Budgets of 12 states, accounting for 63-65% of Indian cement demand, reveal a substantial 11% increase in total allocations for the current fiscal. The enhanced investment is expected to stimulate cement demand, driving growth of 7.5-8.5% from the infrastructure sector." Rural housing will continue to dominate cement consumption, with an estimated share of 32-34%, as a healthy monsoon season is expected to boost agricultural income, which will create housing demand. The pace of execution is expected to pick up under the Pradhan Mantri Awas Yojana – Gramin, with a rise in sanctions and more under-construction units. The urban housing segment, which faced headwinds in fiscal 2025 due to sluggish real estate, is expected to regain momentum in the current fiscal, owing to a low base, interest rate cuts and improved execution pace under Pradhan Mantri Awas Yojana – Urban. Sachidanand Choubey , associate director, Crisil Intelligence said, "A demand surge is anticipated across segments, driven by increased capex allocations for infrastructure and housing ministries. This uptick is expected to support a price rise in fiscal 2026, following a two-year lull." The industrial and commercial segment, which accounts for 13-15% of the domestic cement demand, is expected to see a steady growth this fiscal, driven by traction from commercial real estate and warehousing . Following three years of strong growth, the segment had slowed down in fiscal 2025 owing to moderation in private capex growth.
Times of Oman
22-04-2025
- Business
- Times of Oman
Cement demand set to rise 7% this fiscal, prices by 2-4%: Crisil
New Delhi: The cement sector is expected to see a 6.5-7.5 per cent demand growth this fiscal driven by a 10 per cent rise in budgetary allocation for core infrastructure ministries and on expectation that an above-normal monsoon will boost agricultural profitability, in turn lifting rural housing demand, according to a report by Crisil Intelligence. In fiscal 2025, cement demand growth was moderate at 4.5-5.5 per cent owing to a sluggish start to the year because of the general elections, spatially well-distributed monsoon that impacted construction along with high base of past three fiscals. Weak state government spending in the first half also slowed pace of project execution and a slow real estate market impacted urban housing. Infrastructure, which accounts for 29-31 per cent of the domestic cement demand, is expected to remain a key demand driver in the current fiscal too, the report added. Within infrastructure, roads have been the largest contributor, followed by railways, irrigation and urban infrastructure. Sehul Bhatt, Director, Crisil Intelligence, said, "Notably, budgets of 12 states, accounting for 63-65 per cent of Indian cement demand, reveal a substantial 11 per cent increase in total allocations for the current fiscal. Furthermore, the government's emphasis on establishing specialised rail corridors for the energy, mineral and cement industries, along with initiatives to promote tourism, is expected to bolster demand. The enhanced investment is expected to stimulate cement demand, driving growth of 7.5-8.5 per cent from the infrastructure sector." According to the report, the rural housing will continue to dominate cement consumption, with an estimated share of 32-34 per cent, as a heathy monsoon season is expected to boost agricultural income, which will create housing demand. In addition, several schemes by central government such as PMGSY and MNREGA targeted towards rural segment will also support consumption due to higher budgetary allocation. The pace of execution is expected to pick up under the Pradhan Mantri Awas Yojana - Gramin, with a rise in sanctions and more under-construction units, as per the report. Average rural wages, which are estimated to have increased 25 per cent on-year in fiscal 2025, are expected to remain on the higher side this fiscal too. The urban housing segment, which faced headwinds in fiscal 2025 due to sluggish real estate, is expected to regain momentum in the current fiscal, owing to a low base, interest rate cuts and improved execution pace under Pradhan Mantri Awas Yojana - Urban. The allocation for the scheme is up by a substantial 45 per cent in the Union Budget 2025-26. The industrial and commercial segment, which accounts for 13-15 per cent of the domestic cement demand, is expected to see a steady growth this fiscal, driven by traction from commercial real estate and warehousing. Following three years of strong growth, the segment had slowed down in fiscal 2025 owing to moderation in private capex growth. Sachidanand Choubey, Associate Director, Crisil Intelligence, said, "A demand surge is anticipated across segments, driven by increased capex allocations for infrastructure and housing ministries. This uptick is expected to support a price rise in fiscal 2026, following a two-year lull. Although competition for market share remains fierce, we estimate a modest 2-4 per cent price increase as companies focus on improving realisations."
