Cement shares under pressure; ACC, Ambuja, Shree Cement crack to 52-wk lows

UltraTech Cement, Dalmia Bharat, JK Cement and India Cements were down between 1 per cent and 3 per cent in Friday's intra-day deals.

Cement shares today

 

Shares of cement companies were under pressure with the frontline stocks ACC, Ambuja Cements, Shree Cement and Sagar Cement registering fresh 52-week lows on the BSE in Friday’s intra-day deals due to concerns that a spike in fuel costs could impact profitability margins.

 

Besides these stocks, UltraTech Cement (the sector giant), Dalmia Bharat, JK Cement and India Cements were down between 1 per cent and 3 per cent. In comparison, the BSE Sensex was down 0.84 per cent at 74,274.

 

In the past month, cement stocks underperformed the market, falling up to 12 per cent, against a 5 per cent decline in the benchmark index.

 

 

Why are cement stocks under pressure?

 

A sharp rise in crude oil prices continues to weigh on investor sentiment. WTI crude now trades in the $103–104-per-barrel range after rising around 7.5 per cent in the previous session, while Brent moved toward the $108 mark amid escalating tensions involving Houthi forces and Saudi Arabia. The sharp increase in crude prices is likely to heighten concerns over India's import bill, inflation and corporate margins, keeping risk appetite subdued, according to Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth-tech firm.

 

Meanwhile, going forward, fuel costs were impacted due to the West Asia crisis, resulting in a substantial rise in pet coke prices between March and mid-June 2026, with some moderation evident in the latter half of June. Freight expenses, which account for a significant portion of cement companies' total costs, are expected to be affected by rising diesel prices.

 

Geopolitical tensions in West Asia have disrupted supply chains leading to a sharp spike in the cost of coal, petcoke, packing bags and other materials. Shree Cement said in its FY26 annual report that the major impact of this intense increase on production costs would be felt in 2026-27.

 

Cement sector – demand & outlook

 

Demand remains subdued across most regions amid the monsoon-led slowdown in construction activity. West India remains relatively resilient, supported by stronger demand in Mumbai and Nagpur, while Gujarat remains muted. East India has seen the sharpest slowdown, particularly in West Bengal and Bihar, with Odisha relatively better. South and Central India remain weak due to slow project execution and subdued rural demand, although Telangana is showing some positive signs. North India reports stable demand, said analysts at Systematix Institutional Equities in the cement sector report.

 

However, the brokerage firm remains constructive on the cement sector, with resilient 7–8 per cent demand growth. Near-term profitability, however, is likely to remain under pressure from ₹70–150/tn of incremental quarter-on-quarter (QoQ) costs. The recent attempts to raise prices across South, East and select West markets provide some early signs of improving pricing discipline, although the sustainability of these hikes will depend on demand recovery. 

 

Analysts expect profitability to recover as fuel and packing costs moderate and structural cost initiatives gain traction. They therefore prefer companies with superior volume growth, strong cost-reduction levers and exposure to favourable regional markets.

 

The cement demand fundamentals remain strong. This is mainly due to continued infrastructure investment in roads, railways, metros, ports, and urban development as well as elevated housing demand supported by demographics, urbanisation, and government schemes and a gradual recovery in private real estate and commercial construction. The industry is therefore highly optimistic of a favourable demand scenario continuing. However, the geopolitical events and forecast of a moderate monsoon may pose a threat to this favourable outlook, Shree Cement said.

 

Further, the cement industry is highly cyclical and depends largely on the country’s economic growth. There is a high degree of correlation between the GDP growth and growth in cement consumption. Being a cyclical industry, the cement sector goes through phases of ups and downs, which accordingly, impacts unit realisations. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.