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Strong volume momentum in Q3FY26E; Capacity ramp-up and demand recovery drive growth (UTCEM, TRCL and ACC to lead):

In Q3FY26E, cement companies under our coverage universe (11 players) are expected to report volume growth of ~11.3% YoY and ~7.0% QoQ, led by a pickup in infrastructure activity and sustained demand from the affordable housing segment. The strong QoQ recovery is largely attributable to pent-up demand following the ~40-day demand lull witnessed in Q2FY26 due to GST-related disruption.

For FY26E, volumes are expected to remain healthy across major cement players, supported by improved demand visibility following GST rate cuts and better execution of ongoing and planned capacity expansion projects, which should aid sustained growth momentum.

Among key players, UTCEM is expected to outperform with ~14.9% YoY volume growth, driven by the ramp-up of newly-commissioned capacities. TRCL is likely to report ~11.9% YoY volume growth, while ACC is expected to post a healthy ~10.9% YoY increase in volumes, supported by steady demand and improved capacity utilisation.

We factor in a price reduction of ~2.8% QoQ:

Cement prices declined 1.5%–3.0% in Q3FY26 after a correction in Q2FY26, led by heightened competition and GST rationalisation, with the sharpest pressure in the South, followed by the East. North and Central markets remained relatively resilient, while the West also saw moderation. Pricing power remained weak amid aggressive capacity addition and a continued volume-over-realisation strategy, with South/East facing INR 15–20/bag higher pressure as compared to North/Central. While an INR 10–20/bag price hike is planned for January 2026 to aid margin, additional discounts in Q4FY26E for year-end volume push could limit near-term pricing upside.

EBITDA/t moderates on price pressure; cost-efficiency offers cushion:

In Q3FY26E, we expect average EBITDA/t for our coverage universe to decline, from INR 846/t in the previous quarter to ~INR 800/t, largely due to a pan-India correction in cement prices and demand disruption from irregular monsoons, the effect of the festive season and pollutionrelated curbs.

That said, lower power and fuel costs, supported by a higher renewable energy mix and an improved rail-road logistics balance, are helping offset pricing pressure and should provide margin support and improve profitability over the medium term.

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