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Strong Volumes despite Disruption

Strong YoY growth in volumes underpins the quarter: In Q2FY26, cement companies under our coverage reported a moderate 9.5% YoY increase in volumes, though growth declined 6.9% QoQ due to an extended monsoon and festive-season disruptions. Among the large players, ACEM delivered the strongest performance with 20.7% YoY growth, followed by ACC at 20.4% YoY and JK Lakshmi Cement at 14.5% YoY. We expect the positive volume trajectory to sustain through FY26E, aided by the recent GST rate reduction. Furthermore, we anticipate a robust demand uptick in H2FY26E, supported by improving government infrastructure spending, which should help maintain the growth momentum.

Strong YoY growth in volumes underpins the quarter: In Q2FY26, cement companies under our coverage reported a moderate 9.5% YoY increase in volumes, though growth declined 6.9% QoQ due to an extended monsoon and festive-season disruptions. Among the large players, ACEM delivered the strongest performance with 20.7% YoY growth, followed by ACC at 20.4% YoY and JK Lakshmi Cement at 14.5% YoY. We expect the positive volume trajectory to sustain through FY26E, aided by the recent GST rate reduction. Furthermore, we anticipate a robust demand uptick in H2FY26E, supported by improving government infrastructure spending, which should help maintain the growth momentum.

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