ChainMap
Draft map. Not yet reviewed by a human, so treat placements and figures as provisional.

Materials

Cement

India's cement chain starts at captive limestone mines and pulls in fly ash from power plants, slag from steel mills, and coal and petcoke for the kiln. Integrated plants turn these into clinker and cement, which moves mostly by road to dealers, ready-mix plants and project sites, with bulk movement by rail now starting to grow. Value pools with the large cement makers, which own the limestone, the kilns and the brands, and the industry is consolidating through acquisitions. CRISIL puts India's installed capacity at 668 MT as of March 2025, with utilisation at about 70% in FY25, and expects grinding capacity to rise by 160 to 170 MT between FY26 and FY28, so the question is whether demand from housing and infrastructure keeps pace.

InfrastructureEnergy transitionOne-page brief
L0

Why now

India is the second-largest cement producer in the world, accounting for more than 8% of global installed capacity, and the industry is entering one of its biggest expansion phases: CRISIL Ratings expects grinding capacity to rise by 160–170mn tonnes between FY25-26 and FY27-28, a 75% jump on the 95MT added in the past three years. At the same time the largest groups are buying rivals, Railways has rewritten cement freight rules to push bulk movement, and cement plants now carry legally binding emission intensity targets under India's Carbon Credit Trading Scheme.

L1

How it works

Cement starts as limestone, which supplies calcium carbonate, crushed and blended with clay or shale into a fine powder called raw meal. The raw meal is warmed in a preheater tower and then fed into a rotary kiln that can reach up to 1450°C, where the limestone breaks down into lime and carbon dioxide and the materials turn into grey nodules called clinker. Cooled clinker is ground with a small amount of gypsum, which controls setting time, and the cement is packed into bags, typically 50 kg, or stored in silos for bulk dispatch. Fly ash from coal power plants and ground slag from steel blast furnaces are also used in cement, standing in for part of the Portland cement.

L2

What drives it

  • structuralHousing and infrastructure demand, with rural housing accounting for nearly one-third of cement consumption per IBEF
  • structuralConsolidation, with the top four companies' capacity share rising from approximately 48 per cent in 2021-22 to nearly 58 per cent in 2024-25
  • structuralEmission intensity targets for cement plants under the Carbon Credit Trading Scheme, where plants that miss targets must buy and surrender carbon credit certificates
  • cyclicalPetcoke, imported coal and rupee movements, which swing kiln fuel costs and the fuel mix from quarter to quarter
  • cyclicalA capacity wave, with CRISIL warning that commissioning of 70MT–75MT in a single fiscal could moderate capacity utilisation in the near term

Non-obvious insights

  • New capacity is being built near buyers rather than at the quarry: CRISIL expects about two-thirds of the additional capacity to come from split grinding units placed closer to consumption centres, which cut freight costs and take one to two years to build against three to four for integrated plants.
  • Kiln fuel is a running choice rather than a fixed input: when petcoke traded at a premium to coal in early 2026, UltraTech cut coke share in its fuel mix to 41pc from 54pc a year earlier, and Argus reports makers buying more domestic coal because it is priced in rupees, shielding them from currency swings.
  • Cement is one of the main outlets for a by-product of coal power: in 2024-25, 27% of fly ash generated was used within the cement industry, second only to roads and flyovers at 32%, per figures cited at a Railways and NTPC conference.

L3 to L5The value chain

Limestone & AdditivesKiln Fuel & PowerPlant EquipmentClinker & Cement MakingReady-Mix ConcreteLogistics & DealersConstruction & End Use

Click any part to open that stage. Arrow keys move between stages.

Signals that would change this chain

  • Quarterly capacity utilisation and the pace of new grinding capacity coming online
  • Petcoke and imported coal prices, and the fuel mix disclosed by large makers
  • Uptake of the Railways bulk cement policy and new bulk terminals
  • Further acquisitions by the two largest groups
  • Limestone block auctions by state governments

The debate

How people disagree about where this industry is heading. This is about the industry, not about any company's shares.

Proponents argue
  • CRISIL Ratings expects healthy incremental demand of 30–40 MT annually over fiscals 2026 to 2028, with demand commensurate with supply addition, bringing utilisation back to around 70%
  • ICRA, cited by IBEF, expects cement volumes to grow by 7–8% in FY27, supported by housing, infrastructure and government-led capital expenditure
  • Railways says its flat-rate cement freight policy, new tank containers and bulk terminals will reduce the cost of transportation
Critics argue
  • CRISIL notes that commissioning of 70MT–75MT in a single fiscal could moderate capacity utilisation in the near term
  • IBEF, citing ICRA, says operating margins are likely to moderate by 200–400 basis points in FY27 due to elevated fuel, freight, and other input costs
  • Pricing has been soft: PTI reported that in FY25 cement prices declined by 7 per cent Y-o-Y to Rs 340 per bag
  • Plants that miss their emission intensity targets must purchase and surrender carbon credit certificates, a new cost for an industry whose core chemistry releases carbon dioxide

Core assumption

Housing and infrastructure demand keeps growing fast enough to absorb the wave of new capacity without a lasting fall in utilisation or prices.

What would change the view

  • Industry capacity utilisation holding near, or falling well below, the around 70% level CRISIL expects over the three fiscals
  • Cement prices per bag and operating margins reported by ICRA through FY27
  • Union Budget capital expenditure and rural housing allocations in the next two budgets
  • Carbon credit certificate prices once trading under the Carbon Credit Trading Scheme begins
  • How much cement moves by rail in bulk under the 2025 Railways policy

Read next

  1. 1
    India's cement capacity addition to see 75% jump over FY26-28: CRISIL
    Moneylife

    Clearest view of the capacity wave: how much is coming, in what form, and how it is funded

  2. 2
    IBEF: Cement industry in India
    IBEF

    Broad, regularly updated overview of demand drivers, production and government programmes

  3. 3
    Consolidation in cement to continue, expects 7-8 pc industry growth in FY26: Dalmia Bharat
    Outlook Business (PTI)

    A large cement maker's own account of consolidation, demand and pricing

  4. 4
    Indian cement makers' petcoke imports may fall in 2026
    Argus Media

    Shows how kiln fuel choices shift with petcoke, coal and the rupee

  5. 5
    India notifies emission intensity targets for nine sectors under Carbon Credit Trading Scheme
    International Carbon Action Partnership (ICAP)

    Explains the emission intensity targets cement plants now have to meet

The full chain at a glance

  1. 1 Limestone & Additives

    Limestone mining plus fly ash, slag and gypsum blended into cement.

    NTPC, Tata Steel, J K Cement, Star Cement

  2. 2 Kiln Fuel & Power

    Coal, petcoke, waste-derived fuels and waste heat recovery power.

    Coal India, ISGEC Heavy Engineering, Geoclean

  3. 3 Plant Equipment & Engineering

    Kilns, preheaters, coolers, grinding mills and plant engineering.

    Walchandnagar Industries, TKIL Industries, Fuller Technologies, Loesche

  4. 4 Clinker & Cement Making

    Integrated plants make clinker. Grinding units turn it into branded cement.

    UltraTech Cement, Ambuja Cements, ACC, Shree Cement, Dalmia Bharat, JSW Cement

  5. 5 Ready-Mix Concrete

    Batching plants that turn cement, aggregates and admixtures into concrete delivered to site.

    UltraTech Cement, Prism Johnson, RDC Concrete, Nuvoco Vistas

  6. 6 Logistics & Dealers

    Road, rail and sea freight, forwarding depots, bulk terminals, dealers and branded retail.

    Container Corporation of India, Kaushalya Logistics, UltraTech Cement, Ambuja Cements

  7. 7 Construction & End Use

    Individual home builders, real estate, and infrastructure and industrial projects.

    Larsen & Toubro, NBCC (India), Godrej Properties

Sources