**Strong Demand for Cement Driven by Real Estate Growth and Government Initiatives**
The demand for cement is expected to remain robust, bolstered by the thriving real estate sector and significant government housing initiatives, particularly the Pradhan Mantri Awas Yojana (PMAY). A recent report from Axis Securities indicates that the anticipated growth in the real estate market, alongside these major housing programs, will help sustain cement demand.
The report highlights that large-scale construction projects under various government schemes, including PMAY, are set to drive ongoing demand for building materials, especially cement, which is crucial for housing infrastructure. It forecasts a cement demand growth of 7% to 8% in FY26, supported by the government’s focus on infrastructure development and continued activity in the real estate sector. Furthermore, the budget allocation for infrastructure and construction in 2025-26 is expected to further enhance the momentum for cement demand in FY26.
Despite a subdued performance in the first half of FY25, where cement demand grew only 2-3% year-on-year, there was a significant recovery in the latter half of the fiscal year, with demand expanding at a high single-digit rate in Q3 and Q4. This positive trend is anticipated to carry into Q1FY26, driven by increased government capital expenditure and a revival in construction activities. Overall, the cement industry recorded a growth of 4-5% for the full year FY25, with core sector data indicating an 8% year-on-year increase in cement output during April-May 2025, fueled by strong infrastructure and construction activities.
Historically, the fourth quarter and the first quarter of the fiscal year are peak periods for cement consumption due to favorable weather conditions, accelerated infrastructure spending, and seasonal increases in real estate activity. Looking ahead, the demand environment remains strong, and this positive trend is expected to persist into Q1FY26. While pricing may remain competitive due to increased competition and additional supply, cement manufacturers are likely to benefit from sustained volume growth.
**FAQ**
**What factors are driving the demand for cement in India?**
The demand for cement in India is primarily driven by robust growth in the real estate sector and significant government housing initiatives like the Pradhan Mantri Awas Yojana (PMAY), along with increased infrastructure spending.