Indian Cement Industry's Rs 1.25 Lakh Crore Capex for FY25-FY27

The Indian cement industry plans to invest Rs 1.25 lakh crore from FY25 to FY27 to meet rising demand, adding 130 million tonnes to its capacity. This expansion, driven by strong demand and market competition, will maintain stable credit profiles for companies due to their low capex intensity and robust balance sheets.

The Indian cement industry has outlined a capital expenditure of Rs 1.25 lakh crore for the fiscal years 2025 to 2027 to address the burgeoning demand, according to a CRISIL report.

During this timeframe, the industry will enhance its cement grinding capacity by 130 million tonnes, representing one-fifth of its current capacity. This investment surge is propelled by a positive demand outlook and competition for market share. The CRISIL report highlights that the low capex intensity alongside strong balance sheets will ensure stable credit profiles for cement manufacturers.

Notably, the projected spending will be 1.8 times greater than the capex witnessed in the previous three fiscal years, yet credit risk profiles will remain unaffected due to sustained low capex intensity and solid financial backing with leverage remaining below 1x, bolstered by robust profitability.

(With inputs from agencies.)