India’s cement industry witnessed a revival in demand during the third quarter of FY26, according to a detailed report by Nuvama Wealth Management. The sector, which had faced sluggish demand and price pressures earlier in the year, saw volumes rise by approximately 7% year-on-year across 15 major companies. The revival was largely attributed to declining cement prices, which boosted consumption in both trade and non-trade segments.
Key Highlights from Q3FY26
- Volume Growth: Cement demand rose ~7% YoY, driven by infrastructure projects and housing demand.
- Price Decline: Prices corrected in October–November 2025, widening the gap between trade and non-trade segments.
- EBITDA Trends: EBITDA per tonne rose 9% YoY due to cost savings, though sequential margins dipped.
- Mixed Performance: While demand improved, realizations remained under pressure, impacting profitability.
Sectoral Performance Snapshot
| Company | Volume Growth (YoY) | Price Trend | EBITDA Impact |
|---|---|---|---|
| UltraTech Cement | Strong double-digit growth | Prices under pressure | Margins stable |
| Ambuja Cements | High single-digit growth | Decline in trade prices | Sequential dip |
| Shree Cement | Robust growth | Non-trade prices fell | Cost savings supported |
| Dalmia Bharat | Moderate growth | Regional price correction | Margins resilient |
| JK Lakshmi Cement | Improved demand | Prices declined | Margins impacted |
| JSW Cement | Expansion-led growth | Price pressure | Sequential decline |
Comparative Analysis: Demand vs Price
| Factor | Q2FY26 | Q3FY26 | Outlook |
|---|---|---|---|
| Demand Growth | Flat to moderate | ~7% YoY increase | Expected to remain strong |
| Price Movement | Stable to rising | Declined in Oct–Nov | Likely recovery in Q4 |
| EBITDA Margins | Sequentially strong | Slight dip | Cost efficiency to support |
| Infrastructure Push | Moderate | Strong | Continued government spending |
Drivers of Demand Revival
- Infrastructure Projects: Government-led road, housing, and urban development programs boosted consumption.
- Housing Sector: Affordable housing demand surged as prices corrected.
- Seasonal Factors: Post-monsoon construction activity picked up pace.
- Price Correction: Lower cement prices encouraged higher offtake in trade and non-trade segments.
Outlook for FY26
- Price Recovery Expected: Analysts anticipate a rebound in cement prices in Q4FY26 as demand remains strong.
- Volume Growth Continuity: Infrastructure-led demand and housing projects will sustain growth momentum.
- Cost Efficiency: Companies focusing on logistics and energy efficiency are expected to maintain margins.
- Positive Sentiment: Overall industry outlook remains optimistic with supportive government policies and benign inflation.
Analytical Perspective
The Nuvama report highlights a classic demand-price dynamic in the cement sector. While declining prices initially pressured margins, they simultaneously revived demand, creating a positive volume trajectory. The challenge for companies will be balancing profitability with competitive pricing.
The sector’s revival underscores the importance of infrastructure spending and housing demand in driving growth. With government initiatives continuing, cement companies are expected to benefit from sustained demand, though price volatility remains a risk.
Disclaimer
This article is a synthesized news analysis based on publicly available industry reports and financial updates. It is intended for informational purposes only and does not represent official company statements or investment advice. Readers are advised to consult verified financial sources before making business or investment decisions.
