A sluggish start has cement makers banking on H2 recovery: Report

New Delhi: India's cement industry is expected to see subdued volume growth in H1FY27 as April 2026 price hikes are unlikely to offset the profitability decline, with weak demand and fresh supply additions during FY27-28 expected to keep prices under pressure, according to a report by Nuvama Institutional Equities.

As per the report, the sector witnessed sluggish demand during April-May 2026 due to multiple factors, including global uncertainty, labour shortages, heatwaves, raw material constraints, and unseasonal rainfall.

Apart from this, cement prices surged across regions in April 2026; to mitigate the impact of rising petcoke prices and packaging costs. In a related report, the brokerage house noted that petcoke prices increased to "USD153/t (up ~USD41/t from Q3FY26) due to global cues with its impact likely to be reflected starting the second half of Q1FY27."


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However, the increases proved short-lived. Weak demand triggered a gradual correction in prices, limiting the net increase to approximately Rs 10-12 per bag by the end of the quarter, it noted.

Imported petcoke prices have declined to USD 132/t from the recent peak of USD 168/t, although they remain higher by approximately USD 20/t QoQ. According to Nuvama, the price hikes implemented in April 2026 are unlikely to be sufficient to offset the decline in the sector's profitability.

The brokerage expects the impact of higher input costs to begin reflecting from late Q1FY27 and continue into early Q2FY27. Additionally, the rise in crude-linked prices is likely to increase packaging costs by approximately Rs 120-150/t, while also exerting upward pressure on freight costs.

"We believe volume growth is likely to be sluggish in H1FY27 before recovering in H2FY27," it said.

Also Read: Cement demand growth likely to moderate to around 5% in FY27: Ambuja Cements

Moreover, the price hikes in April 2026 are unlikely to be sufficient to offset the decline in the sector's profitability as per Nuvama. "Soft demand coupled with large supply is likely to come on-stream during FY27-28, which means that prices are likely to remain under pressure," the report said.