Infra projects, capex, PMAY to spur cement volumes by 7-8% in FY25: ICRA

Bengaluru: Cement production volumes are forecast to rise by 7-8 per cent year-on-year (YoY) to around 460 million tonnes (MT) in the current financial year (FY25),  according to a report released on Thursday by  the research and ratings agency ICRA. The volume recorded in the previous fiscal year was 426 MT. 

The government’s focus on infrastructure projects, sanction of additional houses under the Pradhan Mantri Awas Yojana (PMAY), and the industrial capital expenditure is expected to improve cement volume offtake in the second half (H2) of  FY25.

This is  despite the muted growth at 2-3 per cent YoY recorded in the first quarter of the current fiscal due to the general elections and a concomitant slowdown in construction activity.

Remarkably, green power is forecast to account for 40-42 per cent of the total power mix by the end of the current fiscal, compared to around 35 per cent as of March 2023, for the cement companies in ICRA’s sample set. 

The major cement players in the country aim to reduce their emissions by 15-17 per cent over the next 8-10 years by increasing the share of blended cement, which uses less clinker and consequently less fuel, boosting the share of green power consumption through a mix of solar, wind and waste heat recovery system capacities, the report added. 

"The capacity addition in the cement industry is estimated at 63-70 million tonnes between  FY25 and FY26, of which around 33-35 million tonnes will be added in FY25 (FY24: 32 million tonnes), supported by healthy demand prospects", said Anupama Reddy, vice president and co-group head, ICRA.