India’s cement industry ended FY26 on a relatively strong note, with steady demand and improving prices helping producers navigate a challenging cost environment. Industry analysts expect growth momentum to continue into FY27, although rising input costs and geopolitical uncertainties remain key concerns.
During the fourth quarter of FY26, major cement manufacturers reported volume growth of around 6% year-on-year, reflecting resilient demand from both infrastructure and housing segments. The quarter also witnessed a modest recovery in pricing, with average realisations improving by nearly 2% sequentially after the sharp corrections seen earlier in the fiscal year.
Among leading producers, JK Cement and UltraTech Cement delivered the strongest volume growth, supported by capacity additions and market expansion initiatives. Demand remained robust through January and February but moderated in March amid concerns linked to global developments and weaker market sentiment.
While pricing gains provided some support, profitability faced pressure. Industry-wide earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne declined 3% year-on-year to ₹1,033 during the quarter, impacted by higher raw material costs and increased operating expenses. However, on a sequential basis, profitability improved due to lower fuel costs and stronger pricing.
For the full fiscal year, cement volumes grew 6.2%, while EBITDA per tonne improved significantly from ₹844 in FY25 to ₹997 in FY26, reflecting better operating efficiencies across the sector.
Looking ahead, analysts expect industry demand to expand by 6-7% in FY27. Although growth in the first quarter may be affected by weather disruptions, labour shortages and geopolitical tensions, prospects for the second half remain encouraging. Increased government infrastructure spending and continued construction activity are expected to support cement consumption.
The sector’s performance in FY27 is likely to be shaped by companies’ ability to manage costs, particularly as petroleum coke prices rise. Analysts remain positive on the industry’s medium-term outlook, with JK Cement emerging as the preferred investment choice, while maintaining a constructive view on UltraTech Cement, Ambuja Cements, ACC and Grasim Industries.
