India’s cement industry is experiencing consolidation, with 51 million tonnes of capacity acquisitions and 14 MT in buyouts expected to be completed by the first half of fiscal 2026. This phase marks the largest capacity transfer in two years, with 11% .
The industry’s installed capacity changing hands. Crisil Ratings reports that the acquisitions provide acquirers with an opportunity to scale up quickly and strengthen their market position, as well as access to captive limestone mines more economically. Additionally, ~92% of the capacity being acquired will enable acquirers to expand their footprint in their existing regions and result in lower lead distance.
Inorganic growth also obviates the higher project implementation risks associated with organic expansion, such as procurement of land, tying up limestone mining leases, setting up clinker, grinding and captive power capacities, and stabilizing the plant post commissioning.
The net debt to Ebitda ratio for the sector is expected to increase to 1.2-1.4 times in fiscal 2026 from ~1.0 time at the start of fiscal 2024. However, the sector’s overall credit profile will improve as consolidation will strengthen the business profile of acquiring entities with improved access to limestone, better market accessibility, and rising scale economies in their regions.
India’s data centre industry is also seeing a $6.5 billion investment boom, with over $6.5 billion in investments through private equity, joint ventures, and acquisitions between 2014 and 2024. The ongoing consolidation wave in India’s cement industry is expected to outweigh the marginal rise in financial leverage, leading to an improved credit profile over the medium term.
The Indian cement industry has undergone significant consolidation in recent years, a trend that credit rating agency CRISIL anticipates will bolster the credit profiles of acquiring companies. This consolidation has enabled major players to enhance their market positions, achieve economies of scale, and improve operational efficiencies.
A notable example is the acquisition of ACC Limited by the Adani Group. CRISIL reaffirmed ACC’s ‘CRISIL AAA/Stable/CRISIL A1+’ ratings, citing the strengthened business risk profile resulting from the combined operations of ACC and Ambuja Cements Ltd.
Positioning them as the second-largest cement group in India. The integration is expected to yield synergies, particularly through the Adani Group’s presence in coal, power, and logistics, leading to reduced production costs and a robust financial risk profile supported by a debt-free balance sheet and strong liquidity.
Similarly, JSW Cement Limited (JSWCL) has benefited from consolidation efforts. CRISIL Ratings acknowledges the support from the JSW Group, highlighting operational linkages and financial flexibility within the conglomerate. JSWCL’s financial risk profile is expected to remain comfortable, driven by an adequate capital structure and strong financial flexibility, with key credit ratios projected to improve post-expansion.
The broader industry trend reflects a strategic push towards capacity expansion to meet growing demand. According to CRISIL, Indian cement manufacturers plan to invest approximately ₹1.25 lakh crore between FY25 and FY27, adding 130 million tonnes of cement grinding capacity. This investment is driven by a healthy demand outlook and aspirations to increase market share, with the top five cement
CRISIL’s analysis suggests that the credit profiles of cement manufacturers will remain stable despite increased capital expenditures. The capex intensity is expected to stay within a range of 0.7-0.9 times during FY25-FY27, similar to the past three fiscals.
In summary, CRISIL’s insights indicate that consolidation within the Indian cement industry is poised to strengthen the credit profiles of acquiring companies. Through strategic acquisitions and capacity expansions, major players are enhancing their competitive positions, achieving, all of which contribute to a more robust and resilient.
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