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We expect our cement coverage universe to report Revenue/EBITDA/PAT growth of ~-7%/-22%/-35% QoQ and ~11%/4%/-37% YoY in Q2FY27, supported by resilient volumes and broadly stable realizations despite monsoon, mainly offset by rising input costs. Demand remained relatively strong despite monsoon, although some disruptions were seen in the East due to floods, while other regions remained relatively resilient. Our coverage universe volumes are expected to grow ~10% YoY to ~89.1mt, while overall industry volume growth is expected to grow at ~8% YoY. Realizations are expected to remain broadly stable sequentially, declining by ~0.4% QoQ (+1.1% YoY), as price hikes during September aid companies. On the cost front, higher pet coke, packaging and other operating costs are expected to weigh on profitability

Demand recovery towards the end of the quarter and improved pricing should give support to earnings in H2, although elevated fuel costs remain a key concern (pet coke at ~$187/t) and would need another hike of INR7-8/bag in H2FY27. Infrastructure spending, housing and improving construction activity supported demand recovery towards Sep’26, while large players continued to gain market share. Price hikes undertaken during Sep’26 and further increases announced for Oct’26 should provide aid offset to higher input costs. However, elevated fuel costs, insufficient monsoon, uncertain macro limiting GoI spending may remain few crucial factors to watch. With valuations corrected across the sector in the last two quarters, we remain positive on growth focused companies with strong execution, cost efficiencies and diversified market presence. Top Picks: UTCEM, JKCE & JSWCEMEN.

Realizations to remain broadly stable QoQ despite seasonal weakness:

NSR for our cement coverage universe is expected to decline marginally by ~0.4% QoQ (+1.1% YoY) in Q2FY27. All-India cement prices increased only ~0.2% QoQ through July-September as companies were unable to push much during monsoon; however, pricing momentum improved towards end of Q2. As per our channel checks, further hikes of INR10/bag has been announced for October. Going ahead, we expect pricing to remain firm as demand becomes steady and companies look to pass through elevated fuel costs, although the sustainability of these hikes will remain a key monitorable.

Volume growth to remain resilient despite seasonal weakness:

We expect cement companies under our coverage to report strong ~10% YoY volume growth in Q2FY27 to ~89.1mt, despite the seasonal impact of monsoon. Demand remained strong during JulSept’26 amid weak rainfall, floods in few states and project delays in select regions, particularly East and South. However, demand improved towards September with North, West and South witnessing healthy activity. Higher infrastructure spending, housing demand and continued market share gains by large players should support volumes, while demand is expected to improve further post festivities

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