UltraTech Cement’s Executive Director and Chief Financial Officer Atul Daga has stated that “South could be the new North” for India’s cement sector, highlighting strong demand potential emerging from southern markets that could outpace growth in northern regions over the coming years.
Speaking at an investor interaction, Daga said that the cement industry is witnessing a shift in demand trends as infrastructure projects, metro rail expansions, highways, and industrial corridors gain momentum in southern states such as Tamil Nadu, Karnataka, Telangana, and Andhra Pradesh. He pointed out that while the North has traditionally driven cement volume growth, the South is now emerging as an equally strong market due to massive state spending on capital expenditure and private sector investments in manufacturing and real estate.
UltraTech’s Strategic Focus
UltraTech, India’s largest cement maker with a capacity exceeding 150 million tonnes per annum after recent acquisitions and greenfield expansions, is focusing on both market consolidation and strategic growth. The company recently announced further investments of over ₹13,000 crore to expand capacity by 21.9 million tonnes through a mix of new integrated plants, grinding units, and bulk terminals across states including Tamil Nadu, Andhra Pradesh, and Karnataka.
Atul Daga said that UltraTech remains bullish on demand prospects across India but added, “South has an excellent opportunity to become the leading demand centre in the country, considering its current infrastructure pipeline and urbanisation pace.”
Industry Dynamics: North vs South
The Indian cement industry has traditionally seen the North as its core demand driver, led by Uttar Pradesh, Rajasthan, Punjab, Haryana, and Delhi NCR. However, cement companies have been grappling with supply overhang in southern markets due to excess capacities over the past decade. Analysts note that utilisation levels in the South had remained subdued around 55-60% until FY22 but have begun improving steadily due to a combination of project-based demand, new housing initiatives, and rural consumption stabilisation.
Regional Demand Comparison FY24-FY25 (Estimated)
| Region | Estimated Demand Growth FY24 (%) | Estimated Demand Growth FY25 (%) | Major Drivers |
|---|---|---|---|
| North | 7-8 | 6-7 | Rural housing, highways, real estate |
| South | 9-10 | 10-12 | Metro projects, industrial clusters, urban infra |
| East | 8-9 | 8-9 | Affordable housing, roads |
| West | 6-7 | 6-7 | Urban housing, ports |
| Central | 7-8 | 7-8 | Roads, irrigation projects |
Industry experts suggest that southern states are likely to witness double-digit growth in cement demand in FY25 due to the rapid pace of approvals and execution of metro projects in Chennai, Hyderabad, and Bengaluru, alongside state-level schemes to boost housing and warehousing capacities.
Competitive Landscape and Pricing
While demand is robust, southern markets remain competitive with players like The India Cements, Ramco Cements, Dalmia Bharat, Shree Cement, and UltraTech actively seeking market share gains. Prices in the South have historically remained under pressure due to surplus capacities, but companies are optimistic about pricing stability as utilisation levels cross 70% in coming quarters.
Atul Daga emphasised that “Pricing power will improve gradually as demand catches up with installed capacities. We expect a balanced market environment in the South over the medium term.”
Current Regional Cement Prices (July 2025)
| Region | Average Price (₹/50kg bag) | Monthly Change (%) |
|---|---|---|
| North | 395-410 | +1.5 |
| South | 370-390 | +2.0 |
| East | 360-380 | +1.2 |
| West | 390-405 | +1.0 |
| Central | 380-400 | +1.3 |
UltraTech’s Capacity Addition Pipeline
The company is implementing one of India’s largest cement capacity expansion programmes with the following upcoming capacities announced:
| State | Capacity Addition (MT) | Estimated Commissioning |
|---|---|---|
| Tamil Nadu | 3.5 | Q4 FY26 |
| Karnataka | 4.0 | Q3 FY26 |
| Andhra Pradesh | 3.0 | Q1 FY27 |
| Maharashtra | 2.5 | Q4 FY26 |
| Rajasthan | 4.5 | Q2 FY27 |
| Other States | 4.4 | FY27 |
This pipeline is part of UltraTech’s broader strategy to maintain market leadership and meet rising cement demand amid India’s infrastructure push and housing for all goals under PMAY.
Analysts’ View
Brokerage firms have reiterated UltraTech as a top pick in the cement sector, citing its robust balance sheet, efficient operations, and strategic expansions. Analysts expect UltraTech’s volume growth to remain at 8-10% CAGR over FY24-27 with EBITDA per tonne recovering from input cost pressures faced last year.
An industry analyst said, “Atul Daga’s comment that South could be the new North reflects an important market pivot in Indian cement dynamics. Companies with well-diversified capacities will benefit the most in the upcoming cycle.”
Challenges Ahead
Despite positive demand trends, key risks include:
- Sharp volatility in petcoke and coal prices impacting margins
- Intense price competition in South India
- Delay in infrastructure project execution due to monsoon disruptions
- Environmental approvals delaying capacity commissioning
However, UltraTech management remains confident of mitigating cost risks through fuel mix optimisation and cost control initiatives under its ‘Green Energy’ and ‘Logistics Efficiency’ programmes.
Conclusion
Atul Daga’s statement “South could be the new North” indicates a structural shift in the Indian cement industry’s demand map, positioning the southern states as the next growth frontier amid accelerating infrastructure and industrial development. UltraTech’s aggressive capacity additions in South India align with this outlook, reinforcing its strategy to remain the market leader with diversified regional dominance.
Disclaimer
This news content is for informational purposes only. It is not intended as investment advice. Readers are advised to consult financial experts before making any business or investment decisions based on this report.
