The positive trend continued in the first two months of FY2026, with volumes rising 8% YoY to 78.7 million MT. For FY2025, cement volumes grew by 6.3% YoY, totalling 453.0 million MT.
ICRA projects a further 6-7% growth in FY2026, with volumes expected to reach 480-485 million MT, driven by sustained demand from the housing and infrastructure sectors. Average cement prices saw an 8% YoY increase in May 2025, reaching Rs. 360 per bag, while prices for the first two months of FY2026 were up 7% YoY. In contrast, FY2025 witnessed a 7% YoY decline in prices to Rs. 340 per bag.
On the input cost front, coal prices dropped 19% YoY to $100 per MT in June 2025, while petcoke prices fell 2% YoY to Rs. 10,880 per MT. Diesel prices remained stable at Rs. 88 per litre. During Q1 FY2026, coal prices were 6% lower, petcoke prices 1% higher, and diesel prices stable compared to the previous year.
ICRA anticipates an 80-150 basis points (bps) improvement in operating margins for its sample set of cement companies, rising to 16.3-17.0% in FY2026. This growth is attributed to expected price hikes and stable input costs. The sample includes leading industry players such as ACC, Ambuja Cements, UltraTech Cement, and Heidelberg Cement India.
A stable outlook for the Indian cement sector, reflects confidence in continued demand and favourable cost conditions due to its critical role in supporting India’s infrastructure and housing development.
