Merger and acquisition activity in the cement sector is likely to remain muted through at least the first half of 2026, as major producers like Adani Group and UltraTech Cement prioritize integration of earlier acquisitions. The slowdown reflects a strategic shift, with both groups focusing on absorbing assets into their operating structures. Analysts point to structural constraints, including a thinned pool of attractive acquisition targets. Many assets with scale, limestone security, or strategic positioning were absorbed in the previous consolidation cycle.
Government infrastructure spending and the recent GST rate cut on cement are expected to support demand momentum through FY27, even as housing continues to account for the bulk of consumption. Housing and infrastructure anchor consumption, with private capital expenditure and industrial activity providing incremental support. Cement volumes are expected to grow 6.5-7.5% to 482-486 million tonnes in FY26, followed by 6-7% growth in FY27.
Capacity additions are accelerating, largely driven by large players expanding organically and sweating assets acquired earlier. Cumulative capacity additions between FY26 and FY28 could exceed 180-200 million tonnes. Despite this, industry-wide capacity utilisation is expected to remain broadly stable at around 70-71%, reflecting a gradual but steady absorption of new capacity.
