Cement companies wrapped up the June quarter with a solid performance, driven by higher realizations following price hikes and robust volume growth, with most companies reporting double-digit volume growth aided by a low base during last year’s election period, an upswing in commercial activity, and a ramp-up in government project execution.
A drop in operating costs also contributed to a sharp rise in EBITDA per tonne. The volume growth was led by Ambuja (16.5%), UltraTech Cement (15.3%), JK Cement (14.3%), and Sagar Cements (11.5%), supported by a rebound in demand.
Shree Cement’s volumes, however, declined by 7.2% due to geopolitical tensions in the northern region. Dalmia Bharat (-5.4%) was impacted by the discontinuation of tolling volumes from Jaypee, while Ramco Cements (-6.8%) faced challenges from the early onset of monsoon, according to domestic brokerage firm Systematix Institutional Equities.
The brokerage noted that companies under its coverage posted a 6% YoY and 5% sequential rise in realizations, largely driven by price hikes in southern markets. This also led to a sharp increase in EBITDA per tonne, up 35% YoY and 17.8% sequentially.
In addition to firm realizations, a decline in power and fuel costs, along with other operating expenses, aided the EBITDA recovery. Energy costs dropped on a YoY basis, helped by nearly a 20% fall in coal prices and softer Brent crude prices.
Freight costs for the brokerage coverage universe rose marginally by 2.6% as logistics efficiencies were partly offset by expansion into newer geographies.
On the bottom line, the net profit of Ramco Cement soars 142.3% YoY, while Shree Cement, JK Cement, and Dalmia Bharat have surged 94.8% YoY, 65.6% YoY, and 46.9% YoY, respectively.
Monsoon dampens near-term cement demand
Cement prices remained flat month-on-month in August 2025 but were relatively stronger year-on-year. The brokerage noted that monsoon slowed construction activity, especially in rural and infrastructure projects, resulting in weaker offtake and limiting companies’ ability to raise or sustain prices.
The demand in the East fell sharply due to early rains, though prices held steady at Rs353 per bag. In the South, prices rose by Rs10 per bag despite the monsoon, though a correction of Rs5–10 per bag is anticipated in the next quarter.
As per the brokerage, central prices dipped by Rs5 per bag, while the North remained unchanged at Rs365 per bag. On an all-India basis, prices had risen 1.2% MoM in August 2025 to Rs360/bag. Channel checks indicate that while demand weakened due to the monsoon, conditions are better than the same period last year.
Sector poised for H2 recovery on infrastructure push, urban housing
Despite the near-term seasonal slowdown, brokerage remained positive on the sector, expecting a recovery in the second half of the year led by robust demand in infrastructure and urban housing, benign input prices, and increasing thrust on green power.
As most of the consolidation is over, it foresees a strong revival in prices and a 7-8% volume growth for H2FY26. Ultratech and Ambuja remain the brokerage’s top picks within the coverage universe, with a price target of ₹14,481 and ₹722, respectively.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
