Near-term margins for cement companies to remain under pressure

The projections in the cement industry are mixed. Prices and demand remained muted in the third quarter (October & November) and short term uptick doesn't seem likely.

- DEVANGSHU DATTA

However, the second quarter of the financial year 2026 (Q2FY26) was good year-on-year (Y-o-Y) for many cement majors aided by base effect, and some analysts expect acceleration in earnings and volume in the next financial year, again aided by base effect.

November was weak, and price recovery is likely to be muted due to aggressive market share strategies by large firms and supply increases as new capacities come online.

Higher petcoke costs and rupee depreciation may limit margin recovery. Demand is muted with slow construction activity, liquidity constraints, and delays in government fund flows.

On an average, pan-India trade prices are down by ₹3 per 50kg bag in November and companies have not been able to sustain hikes. Prices were also down in October. December will probably see higher supply and dealers don't expect price hikes until mid-Jan.

However, many cement companies reported Y-o-Y improvement in profitability in Q2FY26, with aggregate net profit doubling Y-o-Y for some big listed companies, but profitability fell Quarter-on-quarter (Q-o-Q).