Cement Boom: Growth and Challenges Amid Stable Demand

Leading cement companies, including UltraTech and Ambuja, experience volume growth in the March 2025 quarter with expectations for FY26 boosted by infrastructure spending. Despite challenges from geopolitical tensions, the industry anticipates volume growth due to stable demand and price adjustments leading to better operating margins.

Cement firms have recorded notable volume growth in the March 2025 quarter and project continued success into FY26, driven by improved sales realisation and steady demand. Market giants like UltraTech and Ambuja Cements maintain an industry growth forecast of 7 to 7.5 percent for FY26, propelled by government infrastructure projects and a recovering rural economy.

However, geopolitical tensions and volatile trade conditions pose risks. In the recent quarter, cement companies reported volume gains between 3.5 and 10 percent, with increased capacity utilisation year-on-year. While input costs for coal, petcoke, and diesel have decreased significantly, challenges persist with declining topline figures due to lower year-on-year sales realisation.

The all-India average cement price stood at Rs 350 per 50 kg bag in March 2025, with an annual decrease to Rs 340/bag by FY25. Rating agencies project improved operating margins for the cement sector in FY26, buoyed by modest price increases and stable input costs, despite ongoing issues with price realisation due to market consolidation.

(With inputs from agencies.)