Our focus is to remain cost competitive, achieve 80 MT by FY28

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Though cement demand from infrastructure projects may remain buoyant, the rising lending rate may slow down demand from the real estate sector

By Suresh P Iyengar

Updated - October 22, 2026 at 09:29 PM. | Mumbai

Neeraj Akhoury, Managing Director, Shree Cement

The lopsided growth in capacity among the top two players — UltraTech and Ambuja-ACC combine — has not detered the number three ranked Shree Cement from expansion and improving market penetration. Though cement demand from infrastructure projects may remain buoyant, the rising lending rate may slow down demand from the real estate sector. Neeraj Akhoury, Managing Director, Shree Cement shares his thoughts to ensure that the company is focused on operational efficiency, market share, disciplined growth and green energy.

Shree Cement has emerged as one of India’s top three cement producers. How far is the next milestone of 100 million tonnes per annum (MTPA)?

Our immediate priority is to achieve our publicly stated target of 80 million tonnes of cement capacity by FY28. We believe credibility comes from making considered commitments and delivering on them, rather than announcing ambitious targets prematurely. India offers significant long-term opportunities through infrastructure development, urbanisation and housing. Our approach is to improve performance year after year, strengthen our competitive position and create lasting shareholder value. Further milestones will follow from consistent execution.

After capacity additions at Jaitaran and Kodla, how quickly can utilisation improve?

Both facilities benefit from our established brand, dealer network and distribution infrastructure. Jaitaran strengthens our manufacturing presence in Rajasthan, while Kodla (Karnataka) enhances our position in the southern market. Utilisation will depend on regional demand, operational stabilisation and the pace at which additional volumes enter the distribution network. Our priority is to optimise logistics and ramp up production without compromising quality or cost efficiency. These are long-duration assets, and their contribution should be assessed over a longer investment horizon.

New players are adding substantial capacity in northern and eastern markets. Could this erode your market share?

Anybody investing thousands of crores in a plant has done their homework. I would not say they are wrong. Their confidence in these markets is similar to ours. Cement is a local product, and transportation costs determine competitiveness. Customers buy from whoever provides the right quality at the right cost consistently. Our response is to keep costs per tonne low and maintain dealer confidence. We have gained market share in many years, including in crowded markets, and expect to continue doing so.

Is consolidation an opportunity for Shree Cement?

The Indian cement industry remains fragmented, so there is room for consolidation. But the important question is the price at which assets are acquired. Acquisitions generally cost more than building capacity, with the premium paid upfront and recovered over several years. Building our own plants has allowed us to expand at a lower cost using modern technology. We are not against acquisitions. We will seriously consider an asset if it is available at a sensible valuation and fits our markets. At current valuations, building is cheaper. If that changes, our approach could change too.

Is excess capacity likely to trigger a prolonged price war?

Not necessarily. The cement industry has historically operated with capacity exceeding demand and has found its balance. Surplus capacity alone does not automatically mean a price war. When prices fall below costs, production adjusts and the market corrects itself, often over two or three years. The industry has navigated such cycles repeatedly. Cement prices have historically risen more slowly than inflation, and companies have compensated through greater efficiency. Over time, prices and inflation should move closer together.

How vulnerable is cement demand to a slowdown in government capital expenditure?

Government spending is important, but the underlying demand base is the individual building a house in a village or small town. Housing and infrastructure remain essential, and India’s per capita cement consumption is still below the world average. Roads, housing and urban development will continue to support demand. India’s long-term consumption potential remains substantial.

What will drive the next phase of cost reduction and energy efficiency?

I do not expect a single major breakthrough. Our energy efficiency is already close to global benchmarks, making further gains increasingly challenging. Digitalisation is central to the next phase of operational improvement. A significant share of cement-related carbon dioxide comes from limestone itself during heating, which cannot be eliminated simply by changing fuels. However, there is considerable scope to reduce emissions from fuel and power. A large majority of our power comes from green sources, including waste heat recovery, solar and wind. The next step is increasing the use of alternative kiln fuels, particularly agricultural and municipal waste. As waste collection systems improve, adoption should accelerate. Replacing coal can reduce both costs and carbon emissions.

Published on October 22, 2026

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