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South takes the sharpest hike since lockdown

While the cement industry has started the year on a strong note on the pricing front, we expect a part of the hike to get diluted in the upcoming quarter as weak volume will test the patience of firms. It is also likely to see a rise in operating cost on account of the lag impact of petcoke price increase and a possible revision in limestone royalty. Thus, we expect industry’s yearly average EBITDA per tonne to not touch four digits in FY26E.

Pan-India average price rises INR 11 per 50kg bag in April: Our channel checks with dealers, sales executives, and C&F agents suggest barring Gujarat, Uttar Pradesh and North India, most pockets witnessed a MoM uptick in cement prices in the current month. Consequently, all-India average retail price rose by INR 11 per 50kg bag MoM to INR 377, marking a new high since January 2024. Regionally, South and East India witnessed the sharpest MoM price increase while North India lagged. South India led with a significant rise of INR 41 per 50kg bag, followed by East India with an increase of INR 15 per 50kg bag. Prices in West and Central India rose by INR 2 per 50kg bag and INR 1 per 50kg bag, respectively. North India where prices were firm in H2FY25; it has started FY26 on a softer note with a price decline of INR 4 per 50kg bag, primarily due to the harvest season and heatwaves.

Rising temperatures and agricultural activities dampen demand: On the demand side, market intermediaries indicate cement demand remains relatively muted, which led to partial rollbacks of price hikes implemented in early April in several regions. Although the current quarter is usually considered a seasonally strong period for construction activities, the sharp rise in cement prices is likely to curtail demand. April demand was also hit by high levels of inventory, due to volume push from cement firms in March to achieve year-end targets. In addition to this, rising temperatures, the ongoing marriage season, and increased agricultural activities have further contributed to the overall softness in demand. Despite these challenges, most intermediaries expect cement firms to make another price hike attempt in the range of INR 5-50 per 50kg bag in early May. Some intermediaries are of the view that these price hikes may start to dilute from June.

East India improves; Central and North India mixed: Cement prices continue their upward trajectory in East India during April, building on the momentum from March. In contrast, while Central India was range-bound, North India witnessed a MoM decline due to subdued demand. Within East India, Bihar and Jharkhand recorded the sharpest hike of INR 20 per 50kg bag each, followed INR 15 per 50kg bag increase in Odisha. Prices in Chhattisgarh and West Bengal also grew by INR 10 per 50kg bag each. In Central India, Madhya Pradesh saw a mixed trend with select pockets showing a flat trend while a few reporting a slight increase of INR 5 per 50kg bag. Uttar Pradesh was flat MoM. Meanwhile, North India experienced a price correction led by weak demand, with Rajasthan seeing the sharpest drop of INR 10 per 50kg bag, followed by Delhi down INR 5 per 50kg bag. Prices in Punjab were flat MoM.

South India takes a price hike to stay afloat: After failed attempts in the past few months, tables seem to have turned in April for South India with positive movement in prices. Prices at the exit of March had turned non-remunerative and fallen below procurement price of government schemes. While prices in Tamil Nadu, Andhra Pradesh and Telangana surged INR 50 per 50kg bag each, Karnataka was up INR 30. Prices in Kerala grew by INR 25. This was the first double-digit MoM price increase in the past seven months.

In West India, Gujarat softens, Maharashtra holds: After witnessing price softness in March, cement prices in Gujarat continue their downward trend, falling by another INR 5 per 50kg bag in April. On the other hand, Maharashtra prices, which had been rangebound in recent months, saw positive movement in April. Prices in Nagpur rose by INR 10 per 50kg bag, while Mumbai and Nasik recorded an increase of INR 5 each

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