India’s cement producers were able to offset tepid demand growth with higher prices in the first quarter of FY25-26. Cement demand was reported as seeing a low single-digit increase when compared with the year-ago period as extreme heat, geopolitical tensions in the north and an early monsoon impacted cement consumption, according to Antique Stock Broking.
The stock broker predicts an increase in demand of nine per cent YoY, driven by volume increases at UltraTech and Ambuja Cements following recent acquisitions. However, regional growth remained uneven: the south, west and central India seeing high single-digit advances while in the north and east, the market is seeing a marginal contraction.
Pan-India average cement prices increased by four per cent QoQ to approximately INR190/t (US$2.21/t), as in the south prices saw an 11-12 per cent advance and in the east, they gained 4-5 per cent. In other regions, prices remained high but flat. When compared with the same period in FY24-25, Indian cement prices increased 4-5 per cent (INR225/t). Going forward, further increases are expected in July and their sustainability, especially during the monsoon season, will be key in terms of company earnings.
Thanks to lower fuel prices, the total cost per tonne has declined by approximately INR63/t when compared with the equivalent period of the previous year. However, there was a QoQ cost uptick due to seasonal operating leverage and a slightly higher input costs in the 1Q25-26.
