India’s cement industry has for long suffered the notorious reputation of moving in lockstep. Not anymore, though.

As weak pricing and rising fuel costs force several of the country's largest cement makers to moderate expansion plans, UltraTech Cement is taking a contrarian approach.

The largest company in the sector, UltraTech, is sticking to its investment programme and betting that higher profitability and a stronger balance sheet will allow it to capture market share while rivals prioritise margins.

Industry watchers believe that marks an unusual shift for a sector that has seen years of consolidation. The industry has repeatedly come under the Competition Commission of India's scrutiny over allegations of cartelisation.

Now, rather than following the same playbook, India’s cement companies are responding differently to the same market conditions.

Three of the top four players – Adani Cement, Shree Cement and Dalmia Cement — in their latest analyst calls either indicated a moderation in expansion or adopted a wait-and-watch approach.

Analysts attribute that caution to the combination of weak cement prices and rising input costs, particularly petcoke and fuel, because of the West Asia conflict.

While cement demand remains robust, persistent oversupply has prevented companies from sustaining meaningful price hikes.

Faced with rising costs and limited pricing power, most producers have chosen to protect profitability rather than chase volumes. UltraTech is the notable exception.

Price hikes have proved elusive even during the summer quarter, traditionally the strongest period for cement demand. As the industry heads into the monsoon season—typically its weakest quarter—the divergence in strategy is becoming more pronounced.

For FY27, rating agency ICRA estimates cement volumes to grow 7-8%, with capacity additions of 35-37 million tonnes per annum (MTPA). Capacity utilisation is expected to remain at 70-72%, broadly in line with FY26.

Rivals Turn Cautious

Until last year, India's largest cement makers mostly shared similar expansion ambitions.

UltraTech targeted 240.76 MTPA by FY28, Adani Group 155 MTPA by 2028, Dalmia Cement 130 MTPA by FY31 and Shree Cement 80 MTPA by FY29.

These numbers appear to have taken a sentimental beating.

Executives from Shree Cement informed investors that it is a "dynamic situation" and the company has slowed capex because it "will ride the wave as it is," while maintaining its target of 80 million tonnes by 2029.

Dalmia Cement, Shree’s cost competitor, is yet to announce a concrete plan towards its 110-130 million tonne milestone. However, it said it remains on track to achieve the first phase of 75 million tonnes by FY28 and will invest Rs 3,000-3,500 crore annually.

India’s second-largest cement maker, Adani Cement, also dialled down, for the first time since acquiring Ambuja and ACC in 2022, telling investors that "given the headwinds right now for the industry, it makes sense to push a little bit of the capex, but without losing sight of the overall..."

UltraTech, meanwhile, has maintained that "its growth story remains intact." Its broad capex guidance remains Rs 10,000 crore annually over the next four to five years.

Among smaller players, JSW Cement, JK Cement and Star Cement have also retained their capacity guidance.

JSW plans to invest Rs 2,300 crore in FY27 and another Rs 2,200 crore in FY28, while Star Cement has guided for Rs 600-700 crore of capex in FY27 and Rs 1,500 crore in FY28.

Analysts noted that companies such as Star have maintained strong volume growth, cost efficiencies and a dominant position in the North-East.

Ravleen Sethi, director - large corporate ratings for CareEdge said, “The past 18-24 months have seen significant capacity additions both organic and inorganic and most players will need time to stabilise operations and improve utilisation. The West Asia crisis has added further uncertainty; we may see softer demand and pricing in Q2, alongside continued fuel price volatility. That said, this is a short-term blip. We expect the pace of capacity additions to moderate over the next 12-18 months, but the long-term growth story remains firmly intact.”

Why UltraTech Can Afford To Be Different

A major impediment for most of the industry remains pricing.

BNP Paribas noted that after the rollback of multiple hike attempts in May, “The average all-India trade prices in June-26 remained stable with Rs 2/bag declines in East and West. Due to moderate demand, brands were unable to hike prices in Jun-26, with the aim of passing on incremental commodity cost inflation,” adding, “Due to moderate demand, brands were unable to hike prices in Jun-26, with the aim of passing on incremental commodity cost inflation.”

Unable to sustain price increases, most cement makers have shifted their focus from maximising volumes to protecting profitability.

UltraTech appears to be following a different strategy.

Its EBITDA per tonne for the March 2026 quarter stood at Rs 1,253, well above Adani Cement's Rs 735, Shree Cement's Rs 1,161 and Dalmia Cement's Rs 1,023.

The company has also highlighted that its consolidated net debt-to-EBITDA ratio of 0.94x gives it the "financial flexibility to continue investing in growth without compromising on returns to shareholders."

“They (UltraTech Cement) have been able to turn around and improve operational efficiency for the acquired assets; they have a legacy advantage, price premium advantage and economies of scale that allow them to stay highly profitable even without big price hikes. UltraTech is pushing volumes despite the moderate pricing scenario and will continue to,” said an analyst with a domestic brokerage firm, who did not wish to be identified.

This combination of relatively higher profitability and volume push has also helped UltraTech increase market share.

As of March, the company held more than 20% market share across every major region, including 27% in the North, 34% in Central India, 20% in the East, 38% in the West and 23% in the South.

Its next phase of expansion reflects that strategy. Between March 2026 and March 2028, UltraTech plans to add capacity across every region except Central India, with the largest additions in the North and East.

By contrast, newer entrants such as Adani Cement have also had to contend with execution challenges and higher-than-expected acquisition costs, adding to the reasons behind a slower expansion pace.

Industry analysts point out that UltraTech can maximise utilisation rates for its acquired assets faster than its competitors, currently shying away from big capacity addition announcements.

The Next Test

Whether UltraTech Cement’s contrarian strategy persists will depend on how costs and pricing evolve over the coming quarters.

Mumbai-based Antique Limited, a financial services company, said in a June report that average pan-India cement price realisations are expected to remain broadly flat year-on-year, with gains of 2-3% in the North and West, little change in the East and Central regions, and a decline of about 4% in the South.

At the same time, cement makers continue to face rising costs.

Fuel used for transporting cement and petcoke used to fire kilns have both become more expensive following the West Asia conflict. The war has also led to shortages of polypropylene bags used for cement packaging. Some industry executives estimate these factors could increase costs by Rs 250-300 per tonne during the first half of FY27.

For now, most cement producers have chosen to sacrifice volume growth in favour of protecting profitability.

UltraTech is making the opposite bet.

The company continues to target double-digit volume growth in FY27, above the industry's expected high single-digit growth, while maintaining that it intends to grow faster than the sector.

Whether that approach results in greater market share or comes under pressure from persistent cost inflation and weak pricing will become clearer as FY27 progresses.