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 * All-India average price remained flat MoM to Rs322/bag.

 * Dealers expect prices to improve meaningfully from April onwards due to sharp increase in input costs.

We interacted with cement dealers across regions in India to assess demand and pricing trends in Mar’26. Our discussions indicate that demand remained broadly decent, despite higher dispatches and stocking activity ahead of year-end. While underlying demand was uneven with some slowdown observed post Holi and in select markets due to labour issues and weak retail activity. Pricing trends were largely weak MoM, as aggressive volume push led to price declines in key markets of East and South, while most other regions saw flat pricing with no meaningful hikes. Despite good demand in certain pockets, pricing discipline remained constrained due to intense competition and companies prioritising dispatches over margins. Overall, price recovery was deferred, with dealers across regions indicating meaningful hikes likely only from early April, supported by rising input costs amid middle east crisis.

We expect Q4FY26 to be a decent quarter for the cement sector aided by better volumes (~7% YoY on high base), supported by improved demand and gradual uptick in prices on a QoQ basis. This should drive ~Rs100-120/t QoQ improvement in EBITDA/t across companies, aided by operating leverage and better fuel mix. However, H1FY27 outlook remains contingent on ability to take price hikes amid weakening demand (monsoon, lower priority for construction by IHB amid uncertainties, possible cut in GoI spending) and cost inflation (pet coke prices rising sharply by ~$40 MoM to $165/t, polypropylene bag costs, explosives for mining, etc.). Potential fuel-related disruptions impacting logistics can also be significant & unknown yet. These factors necessitate price hikes to maintain margins. We remain positive on cement companies with pan-India presence and few smaller companies where valuations have come off significantly. Top Picks: UTCEM, JKCE, ACEM & JSWCEMEN.

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