Firm-Level Profitability Evolution in India’s Cement Industry (1991–2024): Structural Shifts after Liberalisation
Manjur Alam1, Rabin Mazumder 2
1 Assistant Professor, Lalbaba College, Department of Commerce, University of Calcutta
alammanjur1982@gmail.com
2Professor and HOD, Institute of Engineering and Management under university of engineering and management
rabinmazumder@iem.edu.in
Submitted on: 31.10.2025
Accepted on: 28.06.2026
Abstract: The liberalisation of India’s economy in 1991 marked a defining transition in the evolution of the cement industry, transforming it from a heavily regulated and fragmented market into a competitive, capital-intensive sector. This study examines the long-term trajectory of firm-level profitability in the Indian cement industry from 1991 to 2024, tracing the structural and behavioural shifts that accompanied successive phases of policy reform, capacity expansion, and market consolidation. The analysis employs fixed-effects regression, structural break tests and event-study approaches with a balanced panel dataset sourced from CMIE Prowess and corporate annual reports to identify key inflection indicators of profitability trends around significant liberalisation goals.
The results identify three different regimes of profitability: a post-deregulation growth period in the 1990s driven by capacity liberalisation and foreign investment; a stabilisation phase in the 2000s characterised by cost rationalisation and technology adoption; and a consolidation period post-2010 marked by mergers, energy efficiency gains and increased price competition. Structural break tests establish the presence of significant shifts in the face of major policy and market events such as deregulation of pricing regulations and entry of global companies. The study provides a long horizon empirical view on the financial dynamics of one of the core industries of India post liberalisation. It draws on insights from industrial organisation and firm-level data to illustrate the combined effect of policy reforms, economies of scale and technological diffusion on the sustainability of profitability in a mature industrial sector.
Key Words: Firm-level profitability, Cement industry, Economic liberalization Structural change, analysis of panel data, Structural breaks tests, Fixed effects model, Reforming industrial policy Market consolidation (1991–2024) Indian economy