Indian cement producers are anticipated to invest Rs 1.25 trillion in capacity building from the financial year 2025 (FY25) to FY27, driven by a positive demand outlook and a desire to gain market share, according to a report released by the rating agency CRISIL. CRISIL mentioned that the projected capital expenditure (capex) would be 1.8 times higher than the capex during the previous three fiscal years. Despite this, the agency expects that the credit risk profiles of manufacturers will remain stable. The agency attributed this to the continued low capex intensity and robust balance sheets of the manufacturers, with financial leverage staying below one time due to strong profitability. CRISIL's analysis of 20 cement manufacturers, who collectively account for over 80% of the industry?s installed cement grinding capacity as of March, reflects the stated capex. CRISIL also highlighted that more than 80% of the projected capex through 2027 is likely to be financed through operating cash flows, thereby minimising the need for additional debt. Ankit Kedia, director at CRISIL Ratings, added that existing cash and liquid investments of over Rs 400 billion would provide a buffer in case of any delays related to implementation. The report further noted that a healthy 10 per cent annual increase in cement demand over the past three fiscal years has outpaced growth in capacity addition, raising the utilisation level to a decade-high of 70 per cent in FY24 and encouraging manufacturers to increase their capital expenditure.