Cement Sector Navigates Seasonal Slump with Rising Prices

India's cement industry faces a slow second quarter in FY26 due to seasonal effects but benefits from improved price realisations. Despite challenges from operating expenses, the industry anticipates resilience through lower fuel costs and efficient management, with promising growth indicators seen in key regions.

India's cement sector is bracing for a challenging second quarter of FY26 due to seasonal factors leading to subdued volume growth, a report by Nuvama reveals. While the industry grapples with operating deleverage and increased expenses, improved realisations offer a glimmer of hope in the horizon.

The report highlights that even though this quarter is traditionally weak due to the monsoon-related slowdown in construction, the sector is buoyed by a timely reduction in fuel prices and continued cost-efficiency measures. Industry leaders, Ambuja Cement and JK Cement, showcased robust year-on-year growth driven by enhanced government infrastructure spending.

In terms of pricing, the southern and eastern markets saw improved selling prices despite dips from the previous year. A 5 per cent reduction in raw material costs quarter-on-quarter also supported profitability, reflected in a 10 per cent increase in profit per tonne compared to the earlier quarter. However, the cement sector must navigate the monsoon's impact on demand carefully to maintain growth momentum.

(With inputs from agencies.)