The Indian cement sector continues to grapple with muted price trends amid tepid demand. Following a goods and services tax (GST) rate cut in late September, the benefit was passed on to consumers, with the GST on cement reduced from 28% to 18%. As a result, prices eased in October, with weakness persisting through November. Cement demand in certain markets during Q3FY26 has been affected by a mix of factors, including elections in Bihar and the Vidarbha region, labour shortages, and construction slowdowns in Delhi due to pollution.
Consequently, at an all-India level, average cement prices were flat month-on-month at ₹375/bag, according to dealers channel check by Yes Securities. One cement bag weighs 50 kilograms.
“In November, a few regions attempted price hikes of ₹5-10/bag, but these were rolled back within two-three days owing to weak market acceptance and competitive pressure from larger players,” said a Yes report dated 25 November. With that, the average prices for October-November were lower by around ₹6/bag than Q2FY26 exit levels.
For the remainder of Q3FY26, scope for meaningful price hikes remains limited unless input costs for the sector rise significantly. As of now cement companies are expected to remain focussed on volume-led growth to protect market share.
“With the announcement of capex plans by UltraTech Cement Ltd (phase IV expansion plan of around 23 million tonnes) and Ambuja (around 15 million tonnes via debottlenecking), fears about rising competitive intensity have resurfaced,” cautioned Nuvama Research in a report dated 14 November.
Seasonally, the second half of a financial year is typically strong for the cement sector, with companies pushing volumes to meet their sales targets. In this scenario, pricing pressure persists, keeping realizations growth muted. Currently, increased supply due to capacity additions could cap improvement in the sector’s utilization levels, keeping large price increases at bay. With prices expected to remain rangebound, cement makers are increasingly opting for various cost savings initiatives and higher green energy usage to keep a lid on operating costs.
Centrum Broking expects demand to recover in December and remain healthy through Q4FY26 as construction activity peaks. However, any material near-term price recovery is unlikely in December, as most cement companies are expected to continue prioritizing volume over price hikes. Consequently, industry margin may remain range bound in Q3FY26, with the benefit of sequential uptick in volume partly offset by subdued pricing, the brokerage added.
The lack of pricing power has also translated into earnings downgrades for the sector. Stock performance has been underwhelming. In calendar year 2025 so far, shares of major cement makers UltraTech, Shree Cement Ltd, and Ambuja Cements Ltd have delivered only 2-4% returns.
