Driven by increased government spending on key infrastructure projects, leading cement manufacturers reported a solid performance in the June quarter with a double-digit volume growth and higher sales realisation.
Cement makers expect the trend of an overall improvement to continue in FY26.
Moreover, lower input costs, such as a decline in coal and petcoke prices, along with stable diesel costs, also helped in improvement on EBITDA terms, which faced a rough patch in FY25.
Leading cement maker UltraTech Cement reported a volume growth of 9.7 per cent to 36.83 million tonnes (MT), helped by acquisitions of India Cements and the cement business of Kesoram Industries.
Similarly, Adani Group firm Ambuja Cements also reported its highest-ever cement sales volume of 18.4 MT and its highest-ever quarterly revenue at Rs 10,000 crore.
Sales volume of Birla Corporation rose 9.36 per cent to 4.79 MT, and Nirma Group firm Nuvoco Vistas Corp reported a sales volume of 5.1 MMT in Q1.
JK Lakshmi Cement's sales volume increased nearly 10 per cent.
However, some companies, like Shree Cement, saw their volumes decline due to geopolitical tensions in the northern region.
Dalmia Bharat's sales volume fell 5.8 per cent to 7.4 MT, impacted by the discontinuation of tolling volumes from Jaypee, while Ramco Cements reported a 7 per cent decline due to early monsoon rains in Kerala.
In the earnings conference call, Ambuja Cement CEO Vinod Bahety said momentum is built on various factors, including strong value focus, robust volume growth, price improvement and deeper channel engagement.
He expected the trend of price improvement and overall volume improvement to continue.
UltraTech CFO Atul Daga in the earnings call said: "The government capex programme has shown a marked improvement in the first two months of this quarter on the low base of April-May 2024. We are seeing rising state government spending. States like Bihar, Andhra, Gujarat, and Maharashtra are doing much better than the other states year-on-year".
The industry was also supported by the cement price increase.
The all-India average cement price increased by 7 per cent year-on-year in June 2025 to Rs 355 per 50 kg bag.
"In Q1 FY2026, the prices were up 7 per cent year-on-year at Rs 360/bag on account of price hikes undertaken by cement companies amid healthy demand. In FY2025, cement prices declined by 7 per cent year-on-year to Rs 340/bag," according to an Icra report.
Moreover, in July, coal prices declined by 21 per cent year-on-year to USD 103/MT, and petcoke prices fell 3 per cent year-on-year to Rs 10,860/MT.
"In 4M FY2026, the prices of coal were lower by 10 per cent year-on-year, while petcoke and diesel prices were stable on a year-on-year basis," Icra said, expecting the margins likely to "improve by 80-150 bps to 16.3-17.0 in FY2026 due to expected hike in cement prices and stable input costs".
In the near term, the demand is expected to be flat due to the monsoon in the second quarter. However, companies are assured of growth after that, and aim to achieve a growth of around 7 per cent in FY26.
"The cement demand grew by almost 4 per cent year-on-year in the first quarter of FY26, driven by Pradhan Mantri Awas Yojana, Pradhan Mantri Sadak Yojana, Bharat Mala, Sagar Mala and other INSA projects, and we remain bullish for this financial year. We are upping our demand estimate by 1 per cent from earlier 6-7 per cent to now 7-8 per cent," said Bahety.
Dalmia Bharat MD and CEO Puneet Dalmia, in the earnings conference call, said: "Even with the early onset of monsoon, the spot prices of cement are holding up and are almost at a similar level to the Q1 average cement prices. We remain reasonably optimistic that these prices will hold".
