Summary:

According to a CRISIL analysis, Indian cement producers plan to invest $14.89 billion (Rs. 1.25 trillion) in capacity expansion between FY25 and FY27 due to strong demand and competitive market pressures. This capex is 1.8 times higher than the previous three fiscal years. Despite this growth, credit risk profiles are expected to remain stable due to low capital expenditure and robust balance sheets.

CRISIL’s research on 20 cement companies, which account for over 80% of the industry’s installed grinding capacity, shows that more than 80% of the projected capex through 2027 will be funded by operating cash flows, reducing additional debt. Mr. Ankit Kedia of CRISIL Ratings noted that current cash reserves exceeding $4.77 billion will cushion against implementation delays. With a 10% annualized growth in cement demand surpassing capacity additions, utilization reached a decade-high 70% in FY24. Mr. Manish Gupta forecasts a strong demand outlook, with a 7% CAGR over FY25-29 and an additional 130 million tonnes of capacity.

Source: IBEF 

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