Cement prices in India are likely to rise by Rs. 10-15 per bag from mid-October as manufacturers look to offset persistent input cost pressures, according to a report by Emkay Research.
The brokerage said the expected price hike comes amid the onset of the busy construction season, steady demand and a favourable demand-supply balance. Based on its channel checks, Emkay sees a high probability of a Rs. 10-15 per bag increase from October 12.
Cement companies had already implemented price hikes of Rs. 10-15 per bag in the first quarter, but the increases were not enough to offset higher power and fuel costs. Prices also softened during July and August amid the monsoon, adding to the pressure on manufacturers.
Input costs have remained a key concern for the sector over the past six to seven months. Emkay estimates that higher costs have added Rs. 300-400 per tonne to the industry's cost base, with the impact expected to be reflected in second-quarter earnings and remain elevated through the second half of FY27.
Fuel prices have also moved higher. Spot petcoke prices are around $175 per tonne, while imported coal is at about $150 per tonne, around 20% and 16% above their respective second-quarter averages. Packing costs have also increased as polypropylene granule prices moved above Rs. 135 per kg.
The brokerage estimates that the industry would need another sustained price increase of around Rs. 10 per bag, or about 3%, to fully offset the cost inflation.
Demand remains firm
Despite cost pressures, cement demand remains steady. Emkay expects industry volume offtake to grow 7-8% year-on-year in the first half of FY27, led largely by the non-trade segment.
The brokerage expects demand to remain strong over the next 18 months, supported by the upcoming busy construction season and infrastructure activity ahead of the general elections in the first half of calendar year 2029.
It has maintained its estimate of around 7% compound annual growth in cement demand between FY26 and FY28.
Delayed capacity expansion across the industry is also supporting market conditions. Emkay expects clinker utilisation to rise towards 79% by FY28, helping maintain a relatively favourable demand-supply balance.
However, profitability remains under pressure. The brokerage expects second-quarter earnings to decline by Rs. 200-250 per tonne sequentially because of higher fuel costs and negative operating leverage.
With input costs still elevated, the success of the October price hikes could be critical for cement manufacturers to protect margins in the second half of FY27.
