Nomura Sees Q1 Pressure On Cement Margins; Backs Major Players

13 Jul 2026 CW Team

Average trade prices improved three per cent sequentially to around Rs 326 per bag after price increases of about Rs 10 per bag, yet cost headwinds more than offset this benefit. Nomura estimated operating cost per tonne rose four per cent sequentially, and that earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne (t) declined by an average of Rs 50 quarter-on-quarter across its coverage universe. Ambuja Cement was seen as an exception with a forecasted sequential improvement in EBITDA per t.

UltraTech Cement and Shree Cement were expected to report smaller margin declines than peers based in the South because pricing proved stronger in their key markets. The brokerage attributed part of the cost pressure to disruptions from the West Asia conflict as imported pet coke prices rose 12 per cent quarter-on-quarter and thermal coal prices increased 17 per cent. Diesel prices also moved higher during the quarter, contributing further to input cost inflation.

While imported fuel costs have eased slightly from their quarterly averages, Nomura warned that input costs remained above previous quarter levels and that sustaining margins would depend on the industry's ability to hold current price levels rather than on easing input costs. The brokerage maintained buy ratings on UltraTech Cement, Ambuja Cement, Dalmia Bharat, Nuvoco Vistas, Ramco Cements and Shree Cement, and retained a reduce rating on ACC. The assessment emphasised that regional pricing strength and cost management would determine relative outcomes in coming quarters.

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Nomura said cement margins will be under pressure in the June quarter as fuel and packaging costs rose, although volume growth is expected to remain healthy. The brokerage forecast six to seven per cent year-on-year organic volume growth for the Indian cement industry in the period, with Shree Cement identified as likely to post the highest growth at 15 per cent year-on-year. It noted that the West and North regions outperformed on pricing, aiding companies with greater exposure in those markets. Average trade prices improved three per cent sequentially to around Rs 326 per bag after price increases of about Rs 10 per bag, yet cost headwinds more than offset this benefit. Nomura estimated operating cost per tonne rose four per cent sequentially, and that earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne (t) declined by an average of Rs 50 quarter-on-quarter across its coverage universe. Ambuja Cement was seen as an exception with a forecasted sequential improvement in EBITDA per t. UltraTech Cement and Shree Cement were expected to report smaller margin declines than peers based in the South because pricing proved stronger in their key markets. The brokerage attributed part of the cost pressure to disruptions from the West Asia conflict as imported pet coke prices rose 12 per cent quarter-on-quarter and thermal coal prices increased 17 per cent. Diesel prices also moved higher during the quarter, contributing further to input cost inflation. While imported fuel costs have eased slightly from their quarterly averages, Nomura warned that input costs remained above previous quarter levels and that sustaining margins would depend on the industry's ability to hold current price levels rather than on easing input costs. The brokerage maintained buy ratings on UltraTech Cement, Ambuja Cement, Dalmia Bharat, Nuvoco Vistas, Ramco Cements and Shree Cement, and retained a reduce rating on ACC. The assessment emphasised that regional pricing strength and cost management would determine relative outcomes in coming quarters.

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