Daijiworld Media Network - New Delhi
New Delhi, Apr 13: India’s leading cement companies are likely to post steady volume growth in the fourth quarter of FY26, supported by robust construction activity and increased government capital expenditure, according to analysts.
A report by Motilal Oswal Financial Services projects around 10 percent year-on-year revenue growth for the cement sector, along with a modest 4 percent rise in EBITDA across its coverage universe.
However, despite improved volumes, profitability is expected to remain under pressure. Rising fuel and packaging costs—partly linked to geopolitical tensions in West Asia—are likely to impact margins. The brokerage estimates that profit after tax could decline by about 1 percent during the quarter.
EBITDA per tonne is projected to fall roughly 6 percent year-on-year to around ?950, although it may see a 15 percent increase compared to the previous quarter due to better operating leverage. Average EBITDA margins (excluding Grasim Industries) are expected to soften by about 1.2 percentage points year-on-year to approximately 18 percent.
Analysts at Mirae Asset Sharekhan noted that cement prices witnessed gradual increases during the quarter—rising by Rs 7–10 per bag in January, Rs 2–3 in February, and Rs 4–5 in March. This is expected to translate into a modest 1–3 percent year-on-year growth in realisations.
Experts believe the immediate impact of rising petcoke and coal prices on earnings will be limited, as companies continue to rely on lower-cost inventories. However, energy expenses remain a critical factor, accounting for nearly 30 percent of total production costs.
Imported petcoke and coal prices surged by around 15–20 percent month-on-month in March. Since most companies maintain fuel inventories for about 45 days, the full effect of these higher input costs is likely to be felt from the first quarter of FY27.
Industry observers also highlight that capital-intensive sectors like cement and metals stand to benefit from sustained government infrastructure spending. Overall cement demand is projected to grow by 6–7 percent, while steel demand could see an increase of about 8 percent, reinforcing a positive outlook for the sector despite near-term margin pressures.