Shree Cement has warned that production costs will rise sharply in financial year 2026-27 as global supply chain disruptions and geopolitical tensions increase prices of key inputs. In its annual report the company said that while input costs remained largely stable during the first half of 2025-26, prices of raw materials began to trend upward from the start of the second half. The company attributed a late fiscal year spike in the cost of coal, petcoke, packing bags and other materials to disruptions linked to tensions in West Asia.

The company said that the major impact of this intense increase on production costs would be felt in 2026-27 and that those pressures are likely to affect margins. It nevertheless indicated optimism about demand fundamentals, citing continued infrastructure investment in roads, railways, metro networks and ports as support for cement consumption. Elevated housing demand driven by favourable demographics, urbanisation and government housing schemes was described as another sustaining factor.

Shree Cement noted that a gradual recovery in private real estate and commercial construction activity is expected to provide further support to demand. The company flagged risks to the outlook, warning that escalating geopolitical tensions and forecasts of a moderate monsoon could pose a threat to the favourable demand scenario. Management highlighted that close monitoring of input costs and supply chain logistics will be essential.

On the ready-mix concrete business the company reported steady structural growth and rising relevance within the domestic construction ecosystem. The segment was said to be expected to grow at a compound annual growth rate of approximately seven to nine per cent over the medium term. Increasing urbanisation, infrastructure-led construction and a rising preference for organised construction solutions were cited as the main growth drivers.

The company argued that the shift towards ready-mix concrete aligns with broader trends of formalisation, safety, sustainability and productivity enhancement and that these factors provide long-term growth opportunities. It said that, despite near-term cost pressures, strong demand fundamentals should help maintain robust cement consumption.