After Expansion Spree, India’s Cement Majors Will Have To Get To Work In 2026
India’s cement sector enters 2026 focused on cost cuts, sweating assets and execution, as dealmaking slows and pricing power stays weak.
The Gist
India's cement industry is poised for a transformative year in 2026, shifting focus from acquisitions to operational efficiency.
- Deal-making has slowed, with a focus on cost reduction and optimising existing assets.
- Major players like Ambuja Cements aim to cut production costs significantly.
- Consolidation continues but at a moderated pace, targeting smaller regional players for strategic advantages.
After hunting, shopping and bickering over asset buys for years, India’s cement industry is preparing for a very different year ahead. With deal making slowing and capacity actions piling up, 2026 is shaping up as a year of the operational grind.
For cement companies it would be a year focused on cost reduction, sweating existing assets and bolstering market leadership, rather than the headline grabbing acquisitions or price hikes we have seen in the past years.
India’s ever-consolidating cement sector took a breather from its intense deal activity in 2025, except for the expected Adani-Jaypee transaction.
In the next 12 months to follow, it will all be about extracting efficiencies from recently acquired assets, even as pricing power remains elusive and utilisation stays below comfort levels.
Large cement makers are expected to sharpen cost synergies by optimising their logistics, fuel mix changes and scale advantages. While consolidation may not completely stop, acquisition activity is expected to taper, with smaller players continuing to walk a tightrope as they struggle to compete with the cost structures of industry leaders.
Cost Is Key
Top executives at Ambuja Cements, India’s second-largest cement company, have set the tone for the year ahead. The company plans to cut its production cost per tonne to Rs 4,000 by March, a reduction of about 5% from its September 2025 levels.
Industry analysts expect similar cost-cutting measures across the sector. Fuel efficiency, logistics optimisation and large companies flexing their ‘economies of scale’ muscle are actions likely to be seen in the next few quarters.
“The emphasis will shift more to optimising and monetising existing/ recently acquired assets.” said Ravleen Sethi, director of large corporate ratings, at CareEdge. “Rapid ramp-ups, logistics optimisation and energy/mix efficiency will define operational strategy through FY26–28, especially as the pace of large acquisitions slows and companies shift attention toward sweating existing assets.”
Consolidation Turns Regional
The cement industry has seen a flurry of consolidation in the last three years, in the run up to 2026. The Adani Group acquired Holcim’s India assets in 2022, becoming the new owners of Ambuja Cements. UltraTech Cement expanded with Kesoram Industries, India Cements and others, while Adani responded with stakes picked in Penna Cement, Orient Cement amongst others and is expected to be the likely buyer for Jaypee Group’s cement assets, as part of a debt resolution plan.
This buying spree is now losing momentum
Analysts with Systematix in a recent note said that while M&A consolidation will continue — mainly for strategic access to limestone reserves held by smaller players — its intensity is likely to moderate. Greenfield or brownfield expansion costs about $60–70 per tonne, compared to $90–100 per tonne with acquisitions, making smaller regional players the primary consolidation targets.
“Both Adani and UltraTech haven’t yet given up acquisitions ambitions,” said a cement analyst who did not wish to be identified. “The large players will continue to look for more assets, with market share as their focus.”
The impact of consolidation is already visible. In the southern parts of India, the market share of the top five players has risen from under 50% in FY23 to more than 62% currently. In eastern India, the top five have added about 300 basis points of market share during the same period.
A Capex Over-Drive
Even as M&As slow, capacity expansion is accelerating.
In 2025, UltraTech Cement and Ambuja-ACC, the two largest cement companies in India, raised their already ambitious capacity expansion plans.
Aditya Birla Group chairman Kumar Mangalam Birla said UltraTech will top 240 million tonnes per annum (MTPA) of capacity by the end of FY28, a Rs 10,000 crore bump up from the earlier number of 200 MTPA.
Ambuja Cements, meanwhile, raised its FY28 capacity target by 15 MTPA to 155 MTPA at a capex of about $48 per tonne, or roughly $720 million.
India’s total cement capacity stands at around 668 MTPA; with the top two players accounting for nearly 300 MTPA. Crisil estimates the industry will add 75% more capacity during FY26–FY28 compared with the previous three years.
Uneven Demand Growth
Crisil expects incremental cement demand of 30–40 million tonnes annually over FY26–FY28. Capacity additions, however, will be lumpy. About 70–75 million tonnes is likely to be commissioned in FY26 alone, which could potentially depress utilisation in the near term before recovering to about 70% over three years.
CareEdge expects cement demand to grow 6.5–7.5% in FY26, driven by resilient rural housing and steady infrastructure. It also expects a gradual revival in non-trade demand of cement sold to real estate developers and infrastructure companies.
However, regional imbalances remain. Crisil said that southern India saw muted demand growth in FY25, with utilisation stuck at around 60%. Utilisation in the region is expected to remain flat in FY26 and rise only to 62–64% by FY30, constrained by continued capacity additions.
The aggressive expansion by market leaders has also widened volume growth disparities. UltraTech and Ambuja-ACC remain focused on outpacing industry growth, a strategy that has translated into market-share losses for smaller players, particularly in the south, a trend already reflected in their financials.
Will Price Follow?
If volumes are under pressure, pricing will offer little relief.
Cement prices have struggled for years, with attempts at hikes often triggering swift market-share losses. After the recent GST rate revisions, companies have indicated that price increases are unlikely before March. Even beyond that, expectations remain muted.
Sethi from CareEdge said sustained price hikes typically require utilisation to move in the range of 70-75%, “a level unlikely at Pan India level in FY26 given the 180–200 MTPA capacity wave for FY26–28.”
At best, analysts expect a 1.5–2% rise in cement prices between FY27 and FY28. For 2026, the playbook is clear: grow volumes, cut costs and make existing capacity work harder.
In an industry long defined by expansion and acquisition, the next phase will be decided by execution.
