Cement – Sector Update – March kept pricing low, needs hikes to maintain margins
Published on 02 Apr 2026
We expect Q4FY26 to be a decent quarter for the cement sector aided by better volumes (~7% YoY on high base), supported by improved demand and gradual uptick in prices on a QoQ basis. This should drive ~Rs100-120/t QoQ improvement in EBITDA/t across companies, aided by operating leverage and better fuel mix. However, H1FY27 outlook remains contingent on ability to take price hikes amid weakening demand (monsoon, lower priority for construction by IHB amid uncertainties, possible cut in GoI spending) and cost inflation (pet coke prices rising sharply by ~$40 MoM to $165/t, polypropylene bag costs, explosives for mining, etc.). Potential fuel-related disruptions impacting logistics can also be significant & unknown yet. These factors necessitate price hikes to maintain margins. We remain positive on cement companies with pan-India presence and few smaller companies where valuations have come off significantly. Top Picks: UTCEM, JKCE, ACEM & JSWCEMEN.
