 "cement, cement sector")
Major cement companies reported profitable June quarter results in this financial year (Q1FY26), driven by improved realisations resulting from price gains and stable input costs.
Cement prices across the country increased 5 per cent year-on-year (Y-o-Y) to approximately ₹377 per bag. The southern and central regions led the gains, with prices rising over 5 per cent Y-o-Y, while other regions recorded an increase of 2–4 per cent. This contributed to a 4–5 per cent growth in realisations for the companies, supporting improved margins.
The top eight cement producers posted nearly 7 per cent Y-o-Y volume growth, benefiting from a low base in Q1FY25, which was impacted by elections that slowed infrastructure activity and reduced labour availability. Volume recovery was also supported by increased demand in rural housing and industrial sectors.
Additionally, the consolidation and reallocation of 45 million tonnes per annum of capacity in the southern region helped rationalise supply. This shift redirected volumes away from the southeast, contributing to price gains in both the southern and eastern regions, noted Pranav Mehta of Equirus Securities.
Despite the seasonal slowdown seen during the monsoon, cement prices remained resilient across most regions—particularly in the south and east, which had already experienced notable hikes earlier in the quarter. This stability further supported improved realisations and profitability, according to analysts at Axis Securities.
Industry-wide earnings before interest, taxes, depreciation, and amortisation (Ebitda) surged over 40 per cent Y-o-Y, primarily driven by the sharp improvement in realisations, said Dharmesh Shah, cement research analyst at JM Financial Institutional Securities.
Consolidated revenue for listed cement firms grew 10 per cent Y-o-Y in June quarter, equally supported by higher volumes and better realisations, according to Anand Kulkarni, director at Crisil Ratings.
Meanwhile, the overall cost per metric tonne saw a low single-digit Y-o-Y decline in Q1FY26, mainly due to reduced power and fuel expenses. However, raw material costs rose as prices of fly ash and slag increased. Companies also benefited from a sustained focus on green energy initiatives and operational efficiency, which contributed to cost optimisation.
Freight costs displayed a mixed trend, primarily influenced by changes in lead distance, as diesel prices remained largely stable. This favourable-cost environment played a key role in boosting profitability during the quarter, noted Khushbu Lakhotia, director at India Ratings & Research.
While the early onset of monsoon led to a temporary dip in demand in some regions—particularly in Kerala—this was largely offset by strong pre-monsoon buying and stable pricing, according to Axis Securities analysts.
Most major cement players recorded double-digit volume growth, led by Ambuja (16.5 per cent), UltraTech (15.3 per cent), JK Cement (14.3 per cent), and Sagar Cements (11.5 per cent), driven by a strong rebound in demand.
In contrast, Shree Cement's volumes declined 7.2 per cent, impacted by tensions in the northern. Dalmia Bharat also saw a 5.4 per cent drop in volumes, largely due to the discontinuation of tolling arrangements with Jaypee, as highlighted by analysts at Systematix Institutional Equities.
