Cement Sector Q1 Preview: Demand Firm But Costs Pressure Earnings

23 Jul 2026 CW Team

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.

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