Cement Industry Grows 9% in May 2025; Margins Improve as Costs Ease

The cement industry saw a 9% growth in volumes in May 2025, reaching 39.6 million metric tonnes (MT). Prices also went up by 8%, averaging ₹360 for a 50 kg bag, according to ICRA’s report.

In April and May combined, prices were 7% higher year-on-year. This is a recovery from FY25 when prices had dropped by 7% to ₹340 per bag.

Volume Growth

In April and May 2025, cement volumes grew 8% to 78.7 million MT. For the full FY25, total volumes rose 6.3% to 453 million MT.

ICRA expects this positive trend to continue, forecasting 6–7% growth in FY26, with annual volumes estimated at 480–485 million MT.

Operating Margins Improve

Operating margins have started to recover because input costs remained stable. Cheaper coal and petcoke, along with steady diesel prices, helped boost profits.

Margins are likely to rise by 0.8–1.5%, reaching 16.3–17% in FY26.

Input Cost Details

• Coal prices in June 2025: down 19% to $100/MT
• Petcoke prices: down 2% to ₹10,880/MT
• Diesel prices: unchanged at ₹88/litre

In Q1 FY26, coal was 6% cheaper, petcoke was 1% costlier, and diesel remained stable compared to last year.

Installed Capacity

According to the Cement Manufacturers’ Association, India’s installed cement capacity stands at 690 million tonnes.

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Conclusion

The cement industry is bouncing back with strong demand and better margins as input costs ease. With housing and infrastructure driving growth, further expansion is likely in FY26.

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