Cement Industry Pins Hopes On Sales Revival In 2025

New Delhi: The Indian cement industry, witnessing a consolidation and heightened rivalry between two corporate houses snapping smaller players, pins its hope on 2025 for an improvement in sales realisation, higher margins and acceleration in demand, expecting around 8 per cent sales growth helped by an increased government spending on big-ticket infra projects.

Over 50 MTPA (million tonnes per annum) capacity are being acquired for $4.5 billion by two leading players - Aditya Birla group firm UltraTech Cement and billionaire Gautam Adani-led Ambuja Cements, besides organic expansion of the existing units as they have kept their war chest ready prowling for opportunities. The industry faced challenges on numerous fronts in 2024, right from moderate capacity utilisation to lower sales realisation, which impacted the topline of several makers, contraction of margins and slower volume growth.

However, 2024 would also be known for big-ticket acquisitions by UltraTech and Adani Cement to consolidate their positions and achieve their targeted growth ahead of time. Adani Cements, a lateral entrant in the secto,r completed the acquisition of Saurashtra-based Sanghi Industries, Penna Industries and recently announced to acquire CK Birla group firm Orient Cement as part of its inorganic growth strategy.

Besides, it has also snapped up small players facilities as My Home and its subsidiary ACC has also acquired Asian Concretes and Cements. These acquisitions and expansions helped Adani Cement to cross a 100 MTPA capacity with a pan-India presence in 2024 within two years of entry in the sector, with 70 MTPA acquired capacity from Swiss firm Holcim.

The Adani group has plans in the works to raise this to 140 MTPA by FY28, just a shade below market leader UltraTech’s current capacity of 156.66 MTPA grey cement. Aditya Birla group is also firing on all cylinders to maintain its lead, and has plans for 200 MTPA capacity by FY27. In 2024 it announced acquisition of South-based India Cements Ltd and is in the process of acquiring Kesoram Industries’ Cement Business.

According to Deloitte India Partner Rakesh Surana, 2024 was a year of consolidation for the cement industry, marked by significant mergers and acquisitions. “This trend has highlighted a structural shift in the sector, with the largest companies accounting for a substantial share of the overall capacity. Currently, the top five cement producers collectively command an estimated 60-65 per cent of the industry’s capacity,” he said.

EY-Parthenon Partner - energy practice Vinayak Vipul said the Indian cement industry has witnessed muted volume growth of 4 to 5 per cent in FY25, compared to over 10 per cent in the past three years, driven by the impact of elections and an extended monsoon across the country.