India Cement Sector: Decoding expectations: Near-term headwinds baked in, but longer-term supply concerns remain

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India Cement Sector: Decoding expectations: Near-term headwinds baked in, but longer-term supply concerns remain

nable: Running a similar analysis on the full

year numbers (Figure 2CalculatingimpliedEBITDA/tgrowthinFY27-mid-singledigitgrowthsemsreasonablegiventhecurentenvironment), consensus FY27E estimates imply mid-single digit

EBITDA/MT growth YoY, suggesting there is limited room for further cuts to

consensus estimates.

• Utilizations are likely to remain flat: We have updated our plant-wise supply-

demand industry model as we build in the deferred supply growth (Figure 4Ourbotom-upplant-wisecementmodelsugestsIndiancementcapacitycanincreasefromc.810MTinFY26toc.90MTbyFY29E.Utilizationwilremainstableifdemandshowsac.6%CAGR).

Despite slower expansion plans, we think industry capacity could still grow at

a c.6-7% CAGR, reaching 990MTPA by FY29E. Given that this is likely to be

in line with the demand growth, we think industry utilization is likely to remain

flat. This should limit operating leverage and organic margin expansion.

• Diving into capacity additions by major players: North India is likely to see

the highest capacity additions, with UTCEM alone planning to add 22.8MTPA

in the North as part of its Phase-IV for expansion. ACEM and JKCE (not

covered) are also aiming for c.7MTPA addition in the North. UTCEM, ACEM,

DALBHARA and TRCL (not covered) have planned c.17.5MTPA in the

South, with another c.17.5MTPA expected in the West by the major players.

East could see c.16.4MTPA of capacity additions driven by UTCEM, ACEM,

JKLC and NUVOCO (both not covered) (see Figure 7Capacityaditionsacrosmajorcementplayers–34MtpainFY27and58MtpainFY28.Significantdelays/deferalshaveledtoFY26aditionsspilingovertoFY27andFY28aditionsdropingfromc.91Mtpato58Mtpa for details).