New Delhi: Cement volumes are expected to grow 8-9% in FY23 to 380-385 million tonne (MT), driven housing demand, both rural and urban, and infrastructure sector, CareEdge Ratings said in a report. “The combined effect of increasing infrastructure spends, real estate upcycle, low per capita consumption and the expected increase in private sector capex well supports demand growth for cement in FY24-FY25," it added. TRENDING STORIES See All Premium Ad disclosures must be hard to miss and not mixed with . . . Premium Gadkari inaugurates 7 highway projects worth ₹6,500 cr . . . Premium Adani rebuffs report of $400 million fundraise against . . . Premium NASA, SpaceX postpone launch of next space station crew . . . CareEdge expects cement sales volume to grow to 440-450 MT by end of FY25, with central and eastern regions witnessing higher demand. “Given the demand is expected to remain robust in upcoming years, cement players have also announced additional capacity to keep up with the growth pace," it added. The Union Budget for FY24 marks the third consecutive year in which the government has increased budget allocation for key infrastructure sectors, reflecting its commitment to infrastructure-led growth. Government spending on infrastructure and housing demand in the run up to 2024 general election paints an encouraging picture of cement consumption. Despite looming cost challenges, such as fuel prices straining margins, cement players are on an expansion spree and expected to add 85-100 MT by FY25. The industry is likely to add 30-32 MT by the end of the current fiscal, compared to 25 MT in FY22. The total installed capacity is expected to stand at 595 MT. For FY24-25, incremental demand is expected to be 55-60 MT, against which 60-70 MT of capacity is expected to be added in the next two years, resulting in capacity utilisation remaining range-bound at 66-68% for the industry. MINT PREMIUM See All Premium How Bernard Arnault became the world’s richest person Premium India and Germany must address the elephant in the room . . . Premium 10 companies that could announce the biggest dividends . . . Premium How to win the hot war in Ukraine and the cold war that . . . “The robust capacity addition plans by players for FY23-FY25 are leading to additional capacity to be at 1-1. 1x of the expected incremental demand of 90 MT during the same period. This is expected to keep the industry’s capacity utilization (grinding) under check, and they are unlikely to improve beyond 67-69% despite a better demand outlook. However, going forward any variation in the demand drivers amid the upcoming capacity expansion will remain a key monitorable," it said. The top 10 players in the industry have more than 68% of the installed capacity share. Going forward as well, capacity expansion during FY23-FY25 is expected to be predominantly undertaken by top players and hence the consolidated nature of the sector is likely to continue. “The sector may also witness acquisition of mid or smaller-sized players by the top players amid the prolonged margin pressure which the sector is witnessing. This will lead to further consolidation in the sector and better pricing discipline amongst remaining players," said Ravleen Sethi, associate director, CareEdge. Catch all the Industry News , Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates . More Less OPEN IN APP.