Summary:

Moody's Ratings notes that rising cement demand in India is driving industry consolidation, with large companies acquiring smaller regional firms to increase capacity. Over the past five years, the top ten producers have acquired over 140 MMTPA capacity valued at Rs. 89,000 crore (US$ 10.46 billion). Pan-India companies such as UltraTech and Ambuja are expected to continue mergers and acquisitions, targeting smaller, less profitable manufacturers. South India, with over 200 MMTPA capacity, is the most exposed to this consolidation.

India's cement consumption is projected to grow at a 6-7% CAGR through 2030, driven by housing and infrastructure needs. Industry capacity is expected to increase by one-third, adding around 200 MMTPA by FY28. The top ten producers, including UltraTech and Ambuja, will lead this expansion. However, Moody's warns that raw material price volatility and state levies—such as Tamil Nadu’s Rs. 160 per tonne charge - could reduce profitability by 15-20%, with dependence on imported coal adding further risk.

Source: IBEF

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