Indian Cement Industry Projected for Robust Growth Amid Operational Efficiencies

The Indian cement industry is anticipated to grow by 7-8% this financial year, buoyed by the dominance of major companies. With a projected 8% year-on-year volume growth in the March quarter, driven by housing demands and non-trade segments, leaders like Ultratech and Ambuja Cement are expected to see significant gains.

The Indian cement industry is poised for substantial growth, with expectations of a 7-8% rise in the current financial year, a Systematix Research report reveals. Dominated by key players who control 65% of the sector's capacity, these giants are set to benefit most thanks to their scale and operational proficiency.

The report highlights that companies under Systematix coverage are forecasting an 8% year-on-year volume growth for the March quarter (4QFY26), supported by a rebound in demand spurred by individual housing projects and increased activity in the non-trade segment.

Ultratech Cement and Ambuja Cement are projected to spearhead volume expansion at 12% and 10%, respectively, capitalizing on asset optimization. Meanwhile, JK Cement anticipates a robust growth of 14% due to favorable comparisons against a lower prior basis. Conversely, Shree Cement and Ramco Cements are expected to experience marginal gains of approximately 2%.

Other entities, including ACC, Dalmia Bharat, and Nuvoco Vistas, expect growth aligning with the industry's 6-8% average. Increasing cement prices since January, particularly in the south and east, are predicted to aid a 2-3% rise in realizations, despite relatively stable prices in northern, western, and central regions.

Enhanced pricing strategies and elevated volumes are anticipated to counteract the pressure from escalating input costs. The sector eyes an 8% increase in volume, a 13% boost in revenue, an 11% hike in EBITDA, and a 3% rise in profit post-tax for 4QFY26. Operational costs are expected to drop slightly, with a sequential reduction of about Rs 30 per tonne, leveraging superior efficiencies.

Despite the backdrop of surging global energy prices owing to geopolitical turmoil in West Asia, immediate impacts appear subdued due to ample inventories lasting until May. Nonetheless, cost increments are possible, linked to the scarcity of polypropylene bags, along with potential diesel price hikes post-election, raising concerns over margin pressures.

The report underscores the necessity to monitor the durability of recent price adjustments and fluctuations in energy costs as pivotal indicators for future performance. (ANI)

(With inputs from agencies.)