Cement Sector Update : Early monsoon halts price uptick but pricing remains strong YoY - PL Capital
Quick Pointers:
* Cement prices declined by Rs 6–8/bag in the South, West, and East in Jun'25, while prices remained flat in the North and Central regions. The all-India average price fell by ~Rs 4/bag MoM.
* Dealers expect prices to decline further in Jul’25 as the monsoon picks up. However, prices remain strong compared to FY25 and YoY prices are up significantly in Southern & Eastern regions.
We interacted with cement dealers across regions in India to assess the demand and pricing scenario in Jun'25. Our discussions indicate a mixed demand environment across markets. While heatwaves continued to impact demand in some regions, the onset of the monsoon further contributed to demand weakness. As the monsoon sets in across regions, pricing momentum has begun to fade. The southern, western, and eastern markets witnessed a price decline of Rs6–8/bag, while prices in the central and northern regions remained flat MoM. As a result, the all-India average price declined by ~Rs 4/bag to Rs 361/bag by June-end. Looking ahead, dealers expect further price corrections as the monsoon progresses
The first two months of the quarter witnessed a strong uptick in pricing, supported by government infrastructure spending that boosted demand. However, the unexpectedly early onset of the monsoon acted as a partial spoilsport during the quarter. Despite the peak monsoon ahead, the IHB segment is expected to provide some support as interior work is unlikely to come to a complete halt. We expect cement companies under our coverage to post strong Q1FY26 results, led by better pricing, with southern and easternfocused players likely to see a sharp QoQ rise in EBITDA/t, supported by the steepest price hikes in those regions. Additionally, the decline in pet coke prices will aid cost-cutting initiatives, leading to a strong improvement in margins.
Cement prices in Delhi remained flat during the month, with no price hike expected for at least the next two months. Demand remained mixed due to the heat, which continued to impact labor availability as workers returned to their hometowns during this period. Demand is likely to weaken further once the rainy season fully sets in, which could lead to a price decline of around Rs10/bag.
Jaipur cement prices also remained flat MoM. Demand in the region continued to be healthy, supported by purchases from farmers driven by the release of their crop payments during this period. Dealers do not expect prices to rise in the coming months due to the onset of monsoon and an anticipated reduction in demand from both farmers and the IHB segment. Rain has already started in the region and is likely to intensify in the coming days. While a few dealers reported a Rs10/bag increase in prices, the majority reported flat pricing.
Southern region
Cement dealers in Chennai reported a price drop of ~Rs10/bag in Jun’25. Dealers indicated that demand is good to moderate, especially amid a slowdown in construction activity. There is also uncertainty about the sustainability of current prices, with some expecting a possible further cut of Rs5-10/bag to stimulate demand. Labor shortages caused by many North Indian workers returning to their villages have also impacted construction activities.
Cement dealers in Hyderabad reported flattish demand, with no change in prices since May’25 amid subdued market conditions. A local Bonalu festival, which started on 25th Jun and will continue till 24th July, has further impacted productivity and demand. Dealers cite the prolonged real estate slowdown as a key reason for weak demand. While companies are attempting price hikes, but these are not holding in the market. Some dealers anticipate a possible Rs 20/bag price increase post the festival, but no improvement is expected in July as monsoon activity picks up
Eastern region
Cement dealers in Kolkata report that demand during the month has been good, but not exceptionally high. There was no price hike in Jun'25, and dealers do not expect any increase in the near term, especially with the onset of the monsoon. In fact, some dealers anticipate a slight price correction due to rain affecting construction activities.
Cement dealers in Patna report that demand is currently moderate and not particularly strong, which has kept prices flat for the past 1–2 months. North Bihar is seeing relatively better sales than South Bihar, benefiting brands like UTCEM and SRCM. Dealers noted that the first half of June saw good offtake, but momentum has slowed slightly in the latter half. The monsoon has yet to fully set in across the state, which may add further pressure on demand.
Western region
Cement prices in Mumbai remained unchanged, mainly due to the onset of the monsoon. Demand has been severely impacted, halting construction activities, with government projects coming to a complete standstill. However, despite the early monsoon, prices have declined by just ~Rs5/bag, supported by builder-driven projects. Dealers do not anticipate any price hike attempts in Jul'25, as sustaining increases during the peak monsoon season will be challenging.
Ahmedabad cement dealers indicate that overall demand is low, primarily due to the early onset of monsoons in key regions like Surat and Ahmedabad. The dominant trend reflects subdued market activity and flattish demand. As a result, cement prices have declined by ~Rs 10/bag since the beginning of the month, with no recovery expected in the immediate term. Going forward, price correction is likely to intensify amid the peak monsoon season.
Central region
Heat has been the biggest concern in Lucknow, leading to reduced work and impacting labor availability. Demand was decent during the month, which kept prices flat MoM. A few dealers also mentioned a sustained increase in non-trade sales over the past few months. The monsoon is expected to affect demand, likely leading to a price decline in Jul'25.
Cement prices in Bhopal remained flat during the month. Demand was stable in the first half of the month but was affected in the second half due to rain. Rain is expected to continue playing a spoilsport for cement demand in Jul’25 and Aug’25, which will likely prevent any price increases in the near future.
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