Cement industry grows 9% in May; margins rise on stable input costs: Icra

The cement industry has registered a 9 per cent volume growth in May this year at 39.6 million metric tonnes (MT), while the average cement prices also increased by 8 per cent, says a report.

According to the latest report by rating agency Icra, the cement industry, which is facing a lower sales realisation, also reported a price growth of 8 per cent to Rs 360 per 50 kg bag in May 2025.

Moreover, there is also improvement in operating margins, led by stable input costs as energy prices of coal and petcoke, are lower and diesel prices are stable, the report added.

"In the first two months (April and May) of FY'26, the prices were up 7 per cent year-on-year (YoY) at Rs 360/bag (of 50 kg). In FY2025, cement prices declined by 7 per cent YoY to Rs 340/bag," it said.

Moreover, in the months of April and May this fiscal, volumes increased by 8 per cent YoY to 78.7 million MT. "In FY2025, volumes rose by 6.3 per cent to 453.0 million MT," it said.

Based on this, Icra expects cement volumes to grow by 6-7 per cent YoY to 480-485 million MT in FY2026, backed by sustained demand from the housing and infrastructure sectors.

"The operating margins for Icra's sample set of companies are likely to improve by 80-150 bps to 16.3-17.0 per cent in FY2026, on account of expected hike in cement prices and stable input costs," it said.

Prices of inputs as coal and petcoke decreased and diesel was stable in June despite geopolitical tensions.

"In June 2025, coal prices decreased by 19 per cent YoY to USD 100/MT and petcoke prices were lower by 2 per cent YoY at Rs 10,880/MT. Diesel was stable at Rs 88/litre on a YoY basis.

"In Q1 FY2026, the prices of coal were lower by 6 per cent, petcoke prices were higher by 1 per cent and diesel prices were stable on a YoY basis," it said.

According to the Cement Manufacturers' Association (CMA), the apex body of large cement plants in India, India's installed cement capacity stood at 690 MT.