According to a report released by the Investment Information and Credit Rating Agency (ICRA) on July 3, 2023, the domestic cement industry in India is poised for volumetric growth of 7-8% in FY24. This growth is expected to be driven by increased demand from the housing and infrastructure sectors, providing a stable outlook for the sector.

The report also predicts that the industry's operational profits before interest, tax, depreciation, and amortization (EBITDA) will see a year-on-year increase of 14-18% in FY24, reaching US$10.98-11.59 (Rs. 900-950) per million tonnes (MT). This growth is attributed to the softening of input costs.

Furthermore, the cement sector is expected to witness a substantial increase in capacity between FY24 and FY25, with an estimated addition of 63-69 million metric tonnes (MMT). This includes capacity additions of around 33-36 million MT in FY24 and approximately 30-33 million MT in FY25. The projected capacity increase in FY24 is expected to be the highest in the last five years, with a growth rate of 6%.

The report also highlights that operating margins in the cement industry are likely to improve. After reaching their peak in the first half of FY23, power, and fuel prices decreased in the second half of FY23 and are predicted to continue declining in FY24.

Overall, the ICRA report paints a positive picture of the domestic cement industry, with expectations of growth in both volume and profitability. The projected increase in capacity further supports the industry's positive outlook, driven by strong demand prospects and favorable cost dynamics.