Cement Prices Set to Soar in Early FY26 as Raw Material Costs Climb

Indian cement makers are likely to hike prices in the first couple of months of the financial year 2025-26 across India, according to brokerage firm JM Financial. They expect the pan-India average price hike to be around Rs 40-50 per bag.

"With the recent uptick in petcoke prices (>10% up QoQ in Q4), the likely revision of limestone royalty rates, the implementation of mining tax in Tamil Nadu, and continued weak operating performance in the South, we remain hopeful of partial price hike absorption in the market," the brokerage said in its report dated March 29.

It further noted that cement prices across India fell by about 1% month-on-month (MoM) in March 2025, dropping Rs 2 per bag to Rs 373, mainly due to a year-end push to boost sales. Regionally, prices declined by Rs 6-7 per bag in the South, Rs 2-3 per bag in the North and West, remained mostly stable in the Central region, and rose by Rs 7-8 per bag in the East.

Despite this monthly decline, Q4 FY25 saw a 2.5-3% quarter-on-quarter (QoQ) increase in prices, with cement bag prices in the East and North up by 4%, the West and Central by about 3%, and the South remaining largely unchanged.

Looking ahead, cement companies are expected to push for a sharp price hike in April and May 2025, JM Financial said.

Inflationary Pressure on the Cement Sector

Earlier, an Elara Capital report noted that cement prices are expected to face transitory inflation due to disruptions in fuel markets. The March 13 report by Ravi Sodah said that a tariff war has led to diverging fuel price trends—South African coal prices have dropped by about 12%, while Reliance Industries' petcoke prices have surged by about 18%.

China's increased demand for petcoke (which is exempt from tariffs) has pushed up prices, but this demand is expected to decline soon, easing petcoke costs.

Meanwhile, thermal coal is "in a structural bear market" due to weak demand in India and Europe, increased reliance on gas, and an upcoming supply glut, the report noted.

Sodah also said that the cement industry could benefit if sanctions on Russian coal are lifted, as this would increase supply to global markets, potentially driving down coal prices further. Russia’s coal exports have already declined from 210 million tonnes in 2022 to 160 million tonnes in 2024, reducing its global market share.