Daijiworld Media Network- New Delhi

New Delhi, May 20: The Indian cement industry is set to witness a positive trajectory in the coming quarters, according to a latest report by Nuvama Research, which forecasts rising prices and growing demand driven by increased infrastructure spending and a favourable low base in FY25.

“We believe the outlook for the cement space is improving as both volumes and prices are likely to log an uptick going ahead, aided by a low base of FY25E,” the report noted.

According to the research, cement prices saw a region-wide rise in May 2025, with southern India leading the trend, followed by the eastern, central, and western markets. The price hikes have been largely attributed to reviving demand, supported by rising capital expenditure (capex) from both the central and state governments.

Despite a 12% year-on-year dip in central government capex during the first eight months of FY25, spending rebounded in the final quarter, helping annual capex grow by 8%. Similarly, state capex rose by 9% during FY25, though still lower than the 27% jump seen in FY24.

The report also observed that April 2025 witnessed softer cement demand, following strong performance in the preceding quarter. However, momentum is expected to recover sharply as several states gear up for larger infrastructure allocations in FY26.

“With the exception of Maharashtra, key states have budgeted capital expenditure growth ranging from 12% to 69% for FY26, which is expected to provide further thrust to cement consumption,” the report highlighted.

Meanwhile, DPIIT data indicated a 4% year-on-year rise in the Index of Eight Core Industries in March 2025 — a sign of modest recovery, though still below the levels of previous years.

While the report flags a likely partial rollback of the current price hikes by the end of May, it maintains that the overall trend for the sector remains positive, underpinned by government-led infrastructure spending and a rebound in construction activity.

As the country enters a new fiscal phase with state and central projects gaining pace, Nuvama Research believes the cement industry is well-positioned to gain momentum through FY26.