JM Fin expects cement price recovery from April 2026; UltraTech top pick

Domestic brokerage JM Financial said its channel checks suggest that pan-India cement prices fell marginally by about ₹2 per bag to ₹334 in December 2025. On a quarterly basis, prices corrected by 2–2.5 per cent Q-o-Q, largely due to the non-trade segment, with sharper declines of 3–4 per cent in the East and South India.

 

Industry demand likely grew in low double digits year-on-year (Y-o-Y) in December 2025, reflecting broad-based improvements across regions. This implies high single-digit Y-o-Y growth for the December 2025 quarter (Q3FY26), compared with around 4 per cent in the first half of fiscal 2025 (1HFY26). Typically, cement companies see sequential profitability gains of ₹150–200 per tonne in Q3, but JM Financial noted that the recovery this quarter is expected to remain below historical levels.

 

 

"Input costs likely increased by ₹50 per tonne (₹3/bag) during Q3, with the impact expected to flow through in the latter part of Q4 due to inventory holding periods. Any rebound in cement prices will be a key monitorable in the coming months," the brokerage said in its note.

 

UltraTech Cement remains the top pick in the sector for JM Financial. The brokerage has a 'Buy' call on the stock with a target price of ₹14,250 per share. 

Cement prices under pressure, recovery likely only from April

Cement prices across India edged lower on a month-on-month (M-o-M) basis in December 2025, with sequential declines of around 1 per cent in the Central and Southern regions, while prices elsewhere remained largely stable. On a quarterly basis, prices fell by about 2–2.5 per cent Q-o-Q in the December quarter, adjusted for the GST rate cut, driven by sharp declines of 3–4 per cent in the East and South, followed by around 2 per cent in the West and about 1 per cent each in the Central and Northern regions.  ALSO READ | Capital goods firms' revenues seen up 10% YoY in Q3: Elara Capital 

According to analysts, while companies have announced price hikes of ₹10–40 per bag across regions for January 2026, absorption is expected to be limited. A meaningful recovery in cement prices is expected from April 2026, as the annual volume push eases and focus shifts toward profitability.

Industry demand improves but remains uneven

JM Financial said that cement demand is estimated to have grown in low double digits Y-o-Y in December 2025, following mid-single-digit growth in the early part of the quarter, translating into high single-digit Y-o-Y growth for Q3FY26. While early signs of recovery are visible, demand continues to be patchy, with regions such as Delhi NCR facing pressure due to construction restrictions due to pollution. Regionally, demand in Southern India is expected to increase after the Pongal period, while a more sustained recovery in Maharashtra is expected only after the municipal elections in January 2026.  ALSO READ | Analysts bullish on Devyani after Sapphire Foods merger approval

Petcoke prices rise Q-o-Q, input cost pressures build

US CFR petcoke prices dropped by around $7 per tonne in December 2025, with spot prices easing to around $111 per tonne due to lower freight rates. In India, petcoke demand remains muted amid comfortable inventories and a preference for domestic sourcing, partly supported by rupee depreciation.

 

On a quarterly basis, however, average US CFR petcoke prices increased around 5 per cent Q-o-Q in Q3 to $115 per tonne, reflecting a landed cost of around $131 per tonne. As a result, input costs are estimated to have increased by about ₹50 per tonne, or around ₹3 per bag, with the impact likely to be felt from the latter part of Q4FY26 due to inventory holding periods.  Disclaimer: View and outlook shared on the stock belong to JM Financial and are not endorsed by Business Standard. Readers discretion is advised.