India stands as the world’s second-largest cement producer, contributing over 8 percent of the global installed capacity. Notably, the private sector holds a dominant 98 percent of this capacity, with the remaining share held by the public sector.
The top 20 cement companies in India collectively account for about 70 percent of the country’s total production. With abundant high-quality limestone deposits across the nation, the Indian cement industry is poised for significant growth.
In 2023, the industry’s market size reached 3.96 billion tonnes and is projected to expand to 5.99 billion tonnes by 2032, reflecting a CAGR of 4.7 percent from 2024 to 2032.
The Union Budget for 2024-25 has allocated Rs. 11.11 lakh crores for infrastructure projects, which represents 3.4 percent of India’s GDP.
Here are a few cement companies that have announced ambitious capital expenditure plans and provided strong growth guidance for the upcoming years, signaling a positive outlook for the sector:
Ambuja Cements Limited
With a market cap of Rs. 1.57 lakh crores, the shares of one of India’s leading cement companies and a member of the diversified Adani Group surged by 0.2 percent to Rs. 644.75 on Thursday.
The company reported a fall in revenue from operations by 4.6 percent YoY from Rs. 8,713 crores in Q1FY24 to Rs. 8,311 crore in Q1FY25, accompanied by a decline in net profit by 30.4 percent YoY from Rs. 1,135 crore to Rs. 790 crores, during the same period.
Ambuja Cements has outlined significant capital expenditure (capex) plans to expand its cement production capacity.
The company with its subsidiaries ACC Ltd., Sanghi Industries Ltd and Penna Cement Ind. Ltd. has taken the Adani Group’s cement capacity to 89 million tonnes per annum (MTPA) with 21.4 MTPA added in the last 18 months.
The company aims to reach a consolidated cement capacity of 112 MTPA by 2026 and 140 MTPA by 2028, out of which 23 MTPA is under execution and 28 MTPA at various stages.
The aforementioned capex growth from the existing 89 MTPA to 140 MTPA will be met through internal accruals and operating cash flows.
Moreover, on 3rd August, Ambuja Cements announces its first venture in Bihar, marking the largest investment in the state by a cement industry player, at an investment of nearly Rs. 1,600 crore. The Warisaliganj Cement Grinding Unit is a standalone facility with an overall capacity of 6 MTPA.
The stock has delivered positive returns of around 34.3 percent in the last one year as well as 4.2 percent in six months.
UltraTech Cement Limited
With a market cap of Rs. 3.28 lakh crores, the stock opened at Rs. 11,535.2 on Thursday, as compared to its previous closing price of Rs. 11,546.2.
UltraTech Cement reported an increase in revenue from operations by 1.8 percent YoY from Rs. 17,737 crores in Q1FY24 to Rs. 18,070 crore in Q1FY25, accompanied by an increase in net profit by 0.3 percent YoY from Rs. 1,690 crore to Rs. 1,695 crores, during the same period.
During Q1 FY24-25, grey cement capacity expanded by 8.7 MTPA, taking the total grey cement capacity of the company to 149.5 MTPA in India.
As of March 2024, the grey cement capacity stood at 140.8 MTPA, with an aim to achieve a 157 MTPA capacity in FY25, 168.8 MTPA by FY26 and 183.5 MTPA by FY27.
Earlier in April, UltraTech announced significant capex plans of Rs. 32,400 crores over the next three years. The stock has delivered positive returns of around 40 percent in the last one year as well as 8.8 percent year-to-date.
With a market cap of Rs. 32,618.3 crores, at 10:11 a.m., the stock was trading at Rs. 1,739.2 on Thursday, as against its previous closing price of Rs. 1,763.1 on BSE.
The company reported a marginal decrease in revenue from operations by 0.2 percent YoY from Rs. 3,627 crores in Q1FY24 to Rs. 3,621 crores in Q1FY25, but the net profit increased marginally by 0.7 percent YoY from Rs. 144 crores to Rs. 145 crores, during the same period.
The company is planning to achieve 75 MnT by FY28 and become a Pan India player by 2031, having a cement capacity of 110- 130 MnT.
During Q1 FY24-25, the clinker capacity stood at 22.6 MnT, while Dalmia Bharat announced clinker capacity expansion by a total of 23.5 MnT by FY24-25 and 27.1 MnT by FY25-26. In Q1 FY24-25, the capital expenditure stood at Rs. 660 crores primarily funded by internal accruals.
During the current year, the company expects to spend about Rs. 3,500 crores to Rs. 4,000 crores largely towards organic expansions, efficiency improvement, and land & maintenance capex.
In terms of organic expansion, the company stands at 46.6 MnT and aims to reach 49.5 MnT by the end of FY24-25, and by the year 2031, Dalmia Bharat targets to reach over 100 MnT.
The stock has delivered negative returns of around 13.7 percent in the last one year as well as 26.3 percent year-to-date.
Written by Shivani Singh
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