Since 2023, the Indian cement sector has seen multiple major merger and acquisition deals—64 million tonne of capacity to be exact. This number stood at 11% of the total installed capacity in the country in fiscal 2023 and led to the top five cement players increasing their market share from 50% at the time, to 59% in fiscal 2025.
However, multiple factors hint at a possible pause or a slower pace in the cement consolidation trend, as per analysts.
The end objective of M&A activity is to capture more market share in a shorter time period. Thus, the leading two players who have led the consolidation space—UltraTech Cement Ltd. and Ambuja Cement Ltd.—now need to ramp up and stabilise the assets they have already acquired, as per Emkay Research's Harsh Mittal.
For UltraTech Cement, this means increasing unit Ebitda for India Cements assets to the guided Rs 500 per tonne in fiscal 2026, and ramping up Kesoram Industries' assets. For Ambuja Cement, it means stabilising Sanghi's and Penna Cements' assets—which it plans to do in the first half of the current fiscal.
The need for ramping and stabilising acquired assets also sheds light on how brownfield projects could be more return accretive, despite the slightly higher timeframe for commissioning and stabilisation.
While the inorganic expansion does avoid long construction time—seen in greenfield or brownfield projects—the recent acquisitions could, on average, take 1.5 to two years to be actually acquired and ramped up to desired profitability levels.
Mittal also points out that the big ticket acquisitions are likely to deplete cash reserves for UltraTech Cement and Ambuja Cement. This, coupled with high net debt, is likely to discourage players from taking part in meaningful M&A activity in the near to medium term.
Furthermore, mid-sized cement players may be less interested in M&A activity, given that they are already adding capacity at a healthy pace and are decently leveraged.
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