Top executives of companies like UltraTech Cement, Ambuja Cements, Shree Cement, Dalmia Cement and Nuvoco Vistas, in their latest earnings calls, expressed optimism about medium-term demand, projecting industry growth in the range of 7-8 per cent, while betting on premiumisation and improved sales realisations to support earnings amid cost pressures.
Moreover, cement companies are also stepping up capital expenditure plans for FY27, betting on an infrastructure push and housing demand despite near-term challenges.
UltraTech said the sector is facing near-term challenges from higher fuel costs, freight expenses and import-dependent supply chains amid geopolitical uncertainty in West Asia.
“It’s a real headwind on fuel costs, packing bags and freight, on certain import-dependent supply chains, on near-term sentiment in some demand segments,” said UltraTech Chief Financial Officer Atul Daga. He added that elevated crude oil prices could also lead to an increase in domestic petrol and diesel prices.
Power, fuel and selling costs constitute 50-55 per cent of the total operating costs for cement companies.
However, Daga maintained that India’s long-term growth story remains intact, supported by the government’s capital expenditure, infrastructure projects execution and robust housing demand.”We would target double-digit growth,” he said, while projecting sustainable cement volume growth of 7-8 per cent annually, aided by urbanisation, affordable housing initiatives and rural demand.
Ambuja Cements Chief Executive Officer Vinod Bahety projected consolidated volumes to grow about 8 per cent in FY27 to around 80 million tonnes, with an increased focus on trade sales and premium cement offerings.
At the industry level, Bahety expects growth to remain moderate at around 5-5.5 per cent amid concerns over inflation and a weak monsoon. However, he expects a higher growth of 8 per cent for the Adani Group cement business.
“On our overall consolidated volumes, we are expecting it to grow in FY27 by almost 8 per cent to around 80 million-odd tonnes. And we are cognizant of the fact that we will focus on value with trade volumes and premium cement,” he said.
Moreover, cement makers’ top executive also said premiumisation and improving trade mix are helping companies lift sales realisations even in a relatively stable pricing environment.
UltraTech said grey cement pricing strengthened about 2.5 per cent across most geographies during the quarter, supported by premiumisation and a better trade mix, helping improve realisations.
Dalmia Bharat Managing Director and Chief Executive Officer Puneet Dalmia said the company would continue to aggressively pursue premiumisation in FY27, even as revenues improved due to both higher volumes and better realisations.
“Although our realisations appear flattish, it has actually improved by about 1.7 per cent on a quarter-on-quarter basis,” he said.
Shree Cement Managing Director Neeraj Akhoury said geopolitical tensions in the Middle East and forecasts of a moderate monsoon could temporarily impact the sector’s momentum, though domestic demand fundamentals remain resilient.
“India’s macroeconomic environment remains resilient, supported by steady domestic demand and continued policy focus on infrastructure-led growth,” he said.
Nuvoco Vistas Managing Director Jayakumar Krishnaswamy also flagged risks from geopolitical uncertainty, rising fuel costs, currency volatility and higher raw material expenses, particularly for packing materials, warning that margins may remain under pressure for one to two quarters.
Still, he said, infrastructure investments and government spending continue to underpin optimism, with the industry likely to grow 7-9 per cent in the coming year.
The Nirma group firm has earmarked Rs 900 crore capex for FY27 and Rs 960 crore for FY28, underscoring its expansion focus over the next two years.
Dalmia Bharat has outlined a capital expenditure plan of Rs 3,200-3,400 crore for FY27, as it continues to invest in growth and premiumisation.
Aditya Birla group flagship firm UltraTech said Rs 10,000 crore of capex is happening every year, at least for 4-5 years going forward.
“We see a plan of investing around Rs 8,000 crore to Rs 10,000 crore every year for the foreseeable future. Future capex pipeline remains fully funded, and the growth story is intact,” said Daga.
While Adani group firm Ambuja Cements is keeping its capex in FY27 “moderate” in the range of Rs 6,000 crore to Rs 6,500 crore as against Rs 7,500 crore last year, as it focuses on completion rather than taking on new one.