Cement Demand to Surge 7-8% Driven by Real Estate and PMAY Initiatives
The robust real estate market and government initiatives like the Pradhan Mantri Awas Yojana (PMAY) are expected to drive a 7-8% growth in cement demand in FY26, according to a report by Axis Securities.
Cement DemandReal EstatePmayInfrastructure DevelopmentConstructionReal Estate NewsJul 05, 2025
The report highlights that the projected growth in the real estate market, coupled with the government's major housing initiatives, is expected to sustain the momentum in cement demand. The large-scale construction initiatives under various government schemes, including PMAY, are anticipated to drive sustained demand for building materials, particularly cement, which remains essential for housing infrastructure.
According to the report, cement demand is projected to grow in the range of 7% to 8% in FY26, supported by the government's emphasis on infrastructure development and sustained real estate activity. Additionally, the allocation to infrastructure and construction in the 2025-26 budget is likely to further strengthen the cement demand momentum in FY26.
The cement sector witnessed a subdued performance in the first half of the financial year 2025 (Q1FY25), with year-on-year (YoY) growth of only 2-3%. However, cement demand witnessed a notable recovery in Q3 and Q4FY25, expanding at a high single-digit pace. The report highlights that this positive momentum is expected to sustain into Q1FY26, supported by increased government capital expenditure and a revival in construction activity.
For the full year FY25, the industry recorded overall growth in the range of 4-5%. Core sector data released by the central government confirms an 8% YoY growth in cement output during Apr-May'25, driven by robust activity in infrastructure and construction.
Historically, Q4 and Q1 have been peak periods for cement consumption due to favourable weather, accelerated infrastructure spending, and a seasonal uptick in real estate activity.
Looking ahead, the demand environment remains strong, and the positive trend is expected to continue in Q1FY26. While pricing may remain competitive due to heightened competition and incremental supply, cement manufacturers are likely to benefit from sustained volume growth.
Frequently Asked Questions
What is the Pradhan Mantri Awas Yojana (PMAY)?
The Pradhan Mantri Awas Yojana (PMAY) is a flagship program of the Indian government aimed at providing affordable housing to all by 2022. It includes both urban and rural components and focuses on building houses for the economically weaker sections and lower-income groups.
What is the projected growth in cement demand for FY26?
According to the report by Axis Securities, the cement demand is expected to grow in the range of 7% to 8% in FY26.
What factors are contributing to the growth in cement demand?
The growth in cement demand is being driven by the robust real estate market, government initiatives like the Pradhan Mantri Awas Yojana (PMAY), and increased infrastructure spending.
How did the cement sector perform in the first half of FY25?
The cement sector witnessed a subdued performance in the first half of the financial year 2025 (Q1FY25), with year-on-year (YoY) growth of only 2-3%.
What is the historical trend in cement consumption?
Historically, Q4 and Q1 have been peak periods for cement consumption due to favourable weather, accelerated infrastructure spending, and a seasonal uptick in real estate activity.
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