Cement – Monthly Update – Demand improving, pricing pressure persists

We interacted with cement dealers across regions in India to assess demand and pricing trends in Oct’25. Our Discussions indicate that overall demand remained muted, affected by intermittent rains and labour shortages in festivities, though certain markets showed modest month-on-month improvement. Post GST-led reduction in cement prices in Sep’25, prices have further declined in South & East markets led by demand weakness. Northern demand improved slightly, supported by government projects. Western markets demand was stable, and Central demand stayed weak, with recovery likely from November. The all-India average selling price declined by Rs8 MoM to ~Rs316/bag. Going forward, dealers across regions do not anticipate any price hike till Dec’25. With the festive season concluded and rains gradually subsiding, dealers expect demand to pick up further. Increased government spending (31% YoY in Oct’25 reaching 52% of FY26 target) and post-festive construction activities are likely to support volumes. Being a seasonally strong quarter, higher volumes in Q3FY26 are expected to partially offset pricing pressures as companies would try to raise prices on rise in pet coke costs (USD120/t). We believe companies would try taking price hikes in South & East to the tune of recent fall post GST cut. We maintain our positive stance on UTCEM and ACEM, supported by their strong volume growth and ability to increase premium segment share as general trade segment prices remain under pressure.