India Ratings has revised its outlook for Indian cement manufacturers from "negative" in 2012 to "stable to negative" for 2013, driven by limited downside risk for demand.

The ratings agency also expects consolidation in the medium-to-long-term with large M&A activities, according to a report.

"We expect consolidation in cement industry in the medium-to-long-term with large M&A activities in the sector," the rating agency said.

The agency expects credit profiles of large cement firms with superior cost position and pan-India presence to remain stable in 2013. However, smaller companies with unfavourable cost structure and regional concentrations are likely to be under pressure, it said.

Last week, JP Morgan cautioned that the near-term outlook for Indian cement companies remains "hazy", in contrast with market consensus for a strong V-shaped recovery in infrastructure spending over the next 12 months.