Cement industry`s volume to rise 8% to 9% YoY in second half of FY26: Crisil Intelligence
The Crisil Intelligence has estimated that Indian cement industry's volume likely to rise 8% to 9% year-on-year (YoY) in the second half of FY26, led by pent-up demand and better liquidity. Further, industry’s margins are estimated to grow by 250-300 basis points, supported by various factors, including higher realisation, stable cost, GST cut, premiumisation, and volume growth, which will ease pressure for manufacturers. It also expects an overall higher growth of 6.5% to 7.5% this fiscal against around 5% in the previous fiscal.
Meanwhile, the average Pan-India cement prices are expected to remain range-bound at Rs 354-359 per 50 kg bag. Crisil noted that premiumisation will offset the downward pressure exerted by GST rate cuts on retail prices. This along with higher demand will aid an improvement in realisations for the manufacturers. Excluding GST, cement prices are estimated to rise 3% to 4% YoY in the coming quarter. Besides, it expects pace of realisations to slow down to a modest 0% to 2% YoY in the second half of FY26 as against 5% growth in the first half. Consequently, the full-year average improvement is expected to be 2.5% to 3.5% YoY.
In terms of regions, it highlighted that healthy demand prospects and a low base are expected to support price recovery in the east and south, leading to prices inching up 0% to 2% in those geographies this fiscal, after declining 12% and 7%, respectively, last fiscal. However, prices in the other regions are expected to dwindle 2% to 3%. Meanwhile, on the cost side, power and freight costs, which together comprise 54% to 55% of the total expenses, are projected to fall 2% to 3% and 1% to 2%, respectively, this fiscal. However, overall costs are expected to be stable, resulting in an expansion in operating margin to 18% to 20% from 16% last fiscal.
