Cement makers to invest ₹1.2 trillion over three years: Crisil Ratings

Capex during FY26-FY28 to be 50% higher than the previous three years; industry to add up to 170 MT of capacity amid strong demand, says Crisil Ratings

Top Indian cement companies are expected to incur capital expenditure (capex) of about ₹1.2 trillion over the next three years (FY26–FY28), nearly 50 per cent higher than in the past three years, primarily for capacity expansion, according to Crisil Ratings.

 

The report, covering 17 companies that together account for 85 per cent of India’s 668 million tonnes (MT) of installed capacity as of March 31, 2025, said capex intensity will remain range-bound at 0.8–0.9 times, keeping reliance on external debt limited.

 

“Credit metrics will stay steady, with net debt to Ebitda expected at 1.1 times, similar to the past three fiscals,” said Parth Shah, associate director, Crisil Ratings.

 

Focus on sustainability and efficiency

 

Crisil said that about 10–15 per cent of the planned spending will be directed towards green energy and cost-efficiency projects, which will help support profitability.

 

The domestic cement industry is expected to add 160–170 MT of grinding capacity during FY26–FY28, significantly higher than the 95 MT added over the past three years. The expansion is being driven by robust demand and high capacity utilisation levels.

 

Brownfield projects to dominate

 

According to Crisil, about 65 per cent of the upcoming capacity will be brownfield expansion, which requires lower investment and faces fewer implementation challenges compared to greenfield projects.

 

Most of the capex is likely to be funded through internal accruals, which will help maintain stable leverage. Crisil said net debt-to-Ebitda ratios are projected to remain steady, thereby preserving the credit profiles of leading cement producers.