Indian Economy News

India's cement sector sees a concrete 2024 with over 10 major deals

  • IBEF
  • December 16, 2024

In 2024, the cement sector in India experienced a notable surge in mergers and acquisitions, with over ten deals announced, marking the highest activity since 2014. The total value of these agreements exceeded US$ 3.5 billion, primarily driven by leading companies like UltraTech Cement and Adani-promoted Ambuja Cements, particularly in the South Indian market. This consolidation trend has resulted in an increased concentration of cement assets among the top four firms: UltraTech, Ambuja, Shree Cement, and Dalmia Bharat. Despite the rise in deals, cement prices remain under pressure due to sluggish demand influenced by elections and monsoon seasons, making it challenging for companies to implement price hikes. 

The consolidation trend reflects a significant shift in the industry, with nearly 204 million tonnes of cement capacity changing hands since April 2014 and 125 million tonnes of this occurring between FY23 and November 2024. Analysts from Nuvama suggest that while cement prices may have reached their lowest point, substantial increases are unlikely soon due to heightened competition. They project a volume growth of 4-5% for FY25, a decline from the 9% growth seen in FY24. The southern market remains a focal point for further consolidation, as it is still relatively fragmented compared to other regions, presenting opportunities for acquisitions of mid-sized and smaller assets. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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