Cement Demand to Surge 7-8% on Back of Strong Real Estate and Infrastructure Growth
The robust demand for real estate, bolstered by government initiatives like Pradhan Mantri Awas Yojana (PMAY), is set to drive cement demand growth by 7-8% in FY26.
Cement DemandReal EstatePradhan Mantri Awas YojanaInfrastructure DevelopmentConstructionReal EstateJul 06, 2025
The projected growth in the real estate market, coupled with the government’s major housing initiatives such as the Pradhan Mantri Awas Yojana (PMAY), is expected to sustain the momentum in cement demand. The report highlights that the large-scale construction initiatives under the various government schemes, including PMAY, are expected to drive sustained demand for building materials, particularly cement, which remains essential for housing infrastructure.
According to the report, the cement demand is expected to grow in the range of 7 per cent-8 per cent 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 cement demand momentum in FY26, the report added.
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 per cent. 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 per cent. Core sector data released by the central government confirms an 8 per cent YoY growth in cement output during Apr-May’25, driven by robust activity in infrastructure and construction.
The sustained focus on infrastructure development and the government’s major housing initiatives are expected to continue driving demand for cement, ensuring the sector remains a key player in the country’s economic growth.
Frequently Asked Questions
What are the key factors driving cement demand in India?
The key factors driving cement demand in India include robust real estate demand, government initiatives like Pradhan Mantri Awas Yojana (PMAY), and increased allocation to infrastructure and construction in the budget.
What is the expected growth rate of cement demand in FY26?
The expected growth rate of cement demand in FY26 is projected to be in the range of 7-8 per cent, according to a report by Axis Securities.
How did the cement sector perform in the first half of FY25?
The cement sector witnessed a subdued performance in the first half of FY25, with year-on-year (YoY) growth of only 2-3 per cent.
What initiatives are expected to sustain the momentum in cement demand?
The large-scale construction initiatives under government schemes like Pradhan Mantri Awas Yojana (PMAY) and increased government capital expenditure are expected to sustain the momentum in cement demand.
What was the overall growth of the cement industry in FY25?
For the full year FY25, the cement industry recorded overall growth in the range of 4-5 per cent.
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