+
Cement Sector Q1 Preview: Demand Firm But Costs Pressure Earnings
ECONOMY & POLICY

Cement Sector Q1 Preview: Demand Firm But Costs Pressure Earnings

Analysts expect India’s cement sector to record steady demand in the April to June quarter despite mounting input costs, with momentum carrying into FY27. Reports from Jefferies and research commentary from Nomura indicate that pricing and regional gains will support volumes but earnings may be constrained.

Jefferies anticipates industry volumes to grow six point five to seven per cent year-on-year during the quarter, broadly matching the previous period, and expects prices to rise by about two point five per cent quarter-on-quarter rather than an earlier forecast of four to five per cent. The brokerage warned that higher input costs will weigh on margins, with a larger impact likely in the September quarter. It also forecast cumulative cost inflation of around Rs300 per tonne (t) during the first half of 2026-27.

At company level, JSW Cement is projected to report the highest volume growth at 15 per cent, followed by JK at 14 per cent and UltraTech at 13 per cent, while Ambuja Cements is expected to deliver double-digit gains and Birla Corporation may see a six per cent contraction owing to older plant shutdowns and weaker non-trade sales. Earnings before interest, taxes, depreciation and amortisation per t are likely to be pressured across the sector as a result of these cost moves. Jefferies expects UltraTech to post 10 per cent year-on-year EBITDA growth and Dalmia Bharat to record about 17 per cent growth, while Shree Cement, Nuvoco Vistas and Ambuja Cements are seen reporting declines of about seven point five per cent, 17 per cent and 25 per cent respectively.

Nomura’s vice president for equity research anticipated that the June quarter could benefit from stronger-than-expected realisations in eastern regions and said the second half of 2026-27 should improve as input costs ease, construction picks up and pricing stabilises. He estimated that operating costs rose by Rs220 to Rs250 per t in the June quarter but suggested margins should recover later in the year. His preferred stocks remain UltraTech Cement and Dalmia Bharat given valuation support and capacity expansion progress.

Analysts expect India’s cement sector to record steady demand in the April to June quarter despite mounting input costs, with momentum carrying into FY27. Reports from Jefferies and research commentary from Nomura indicate that pricing and regional gains will support volumes but earnings may be constrained. Jefferies anticipates industry volumes to grow six point five to seven per cent year-on-year during the quarter, broadly matching the previous period, and expects prices to rise by about two point five per cent quarter-on-quarter rather than an earlier forecast of four to five per cent. The brokerage warned that higher input costs will weigh on margins, with a larger impact likely in the September quarter. It also forecast cumulative cost inflation of around Rs300 per tonne (t) during the first half of 2026-27. At company level, JSW Cement is projected to report the highest volume growth at 15 per cent, followed by JK at 14 per cent and UltraTech at 13 per cent, while Ambuja Cements is expected to deliver double-digit gains and Birla Corporation may see a six per cent contraction owing to older plant shutdowns and weaker non-trade sales. Earnings before interest, taxes, depreciation and amortisation per t are likely to be pressured across the sector as a result of these cost moves. Jefferies expects UltraTech to post 10 per cent year-on-year EBITDA growth and Dalmia Bharat to record about 17 per cent growth, while Shree Cement, Nuvoco Vistas and Ambuja Cements are seen reporting declines of about seven point five per cent, 17 per cent and 25 per cent respectively. Nomura’s vice president for equity research anticipated that the June quarter could benefit from stronger-than-expected realisations in eastern regions and said the second half of 2026-27 should improve as input costs ease, construction picks up and pricing stabilises. He estimated that operating costs rose by Rs220 to Rs250 per t in the June quarter but suggested margins should recover later in the year. His preferred stocks remain UltraTech Cement and Dalmia Bharat given valuation support and capacity expansion progress.

Related Stories

Gold Stories

Next Story
Products

Interio by Godrej launches modular workplace solutions

Interio by Godrej has launched Workscapes, a modular workplace solutions category designed to help organisations configure and adapt workspaces to changing requirements. The portfolio combines mobile and compatible furniture and support elements that can be rearranged across different work modes without changes to fixed layouts.Workscapes includes Collaboration Tables, Privacy Solutions, Mobile Markerboards and Space Dividers, Power Solutions, Storage and Support Elements, Meeting and Presentation Tools, and Seating Elements. The range is designed for focused work, collaboration, informal disc..

Next Story
Infrastructure Urban

CAFE-III Gives Auto Industry Investment Clarity

The government’s new Corporate Average Fuel Economy (CAFE-III) norms have provided the automobile industry with a clearer framework for technology investments, according to industry representatives. The framework seeks to balance environmental objectives with flexibility for manufacturers while encouraging the adoption of flex-fuel vehicles and biofuels. Society of Indian Automobile Manufacturers (SIAM) President Shenu Agarwal said the five-year framework would give automakers greater predictability to plan investments and accelerate innovation. He said the regulation established annual targ..

Next Story
Infrastructure Energy

Mines Ministry to Auction Two Offshore Mineral Blocks in Andaman Sea

The Ministry of Mines will launch an auction of two offshore mineral blocks in the Andaman Sea on Thursday, seeking to unlock India’s offshore mineral potential and strengthen long-term mineral resource security. The blocks will be offered under a composite licence, which permits exploration and development activities in accordance with the applicable regulatory framework. The ministry said the auction was intended to encourage systematic exploration, attract investment and promote the use of advanced technologies for offshore mineral exploration and development. The initiative is also aimed..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code