Cement producers have entered FY26 on a agency footing, aided by worth hikes in April, in accordance with vendor channel checks by numerous brokerages. The all-India common cement worth rose to ₹357 per bag in April, up from ₹338 in March, as per Motilal Oswal Monetary Providers.
Regionally, costs rose by a mean ₹40 per bag month-on-month within the southern market and by ₹20 within the east. Within the north, west, and central areas, the rise ranged from ₹8 to ₹15 per bag.
If these worth hikes maintain, they may considerably elevate profitability throughout the sector. In spite of everything, this comes at a time when prices of key inputs similar to imported petroleum coke and coal have edged greater, stoking issues about margin strain. Whereas entry to low-cost gasoline could have helped firms sail via the March quarter (Q4FY25), the burden of elevated enter prices is anticipated to weigh on the June quarter (Q1FY26).
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In that context, worth hikes through the seasonally robust development interval might assist cement makers offset value pressures and defend margins. In actual fact, Motilal Oswal estimates that cement spreads—outlined because the distinction between common cement costs and vitality prices on a per-tonne foundation—are possible at a 17-month excessive in April, largely pushed by pricing positive factors.
The present gradual uptick in cement costs will be attributed, largely, to the consolidation part now largely behind the sector. A wave of mergers and acquisitions lately had depressed pricing energy as massive gamers competed aggressively on volumes and market share. That strain now seems to be easing.
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Demand developments are additionally possible to enhance in Q1FY26 on elevated labour availability, extra demand from the house constructing section and inflow of presidency’s infrastructure-related spending. This could make room for additional worth hikes. IIFL Securities estimates the sector to clock a muted 5% year-on-year quantity progress in FY25, however foresees a restoration in FY26 with 6-8% quantity progress and higher profitability.
That stated, cement firms have confronted steep earnings downgrades in current quarters, primarily as a result of weak realizations. Most gamers—barring these targeted on the south—are anticipated to report sequential enchancment in realizations in Q4FY25. Nonetheless, significant earnings upgrades will depend upon whether or not worth enhancements maintain via Q1FY26, backed by higher pricing self-discipline and demand assist.
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The near-term outlook, nonetheless, stays clouded by world commerce uncertainties and a recent spike in vitality prices. Thus far in 2025, share efficiency of pan-India targeted cement makers has been combined, with UltraTech Cement Ltd and Ambuja Cements Ltd fetching marginally constructive returns and ACC Ltd down 2%.
