Strong Q4 Projections for India's Cement Industry Amidst Rising Costs
Synopsis
India's leading cement companies are set to achieve substantial volume growth in Q4 FY26, driven by increased construction and government spending. Despite potential profitability pressures from rising costs, forecasts suggest a promising outlook for the sector.
Key Takeaways
10% year-on-year revenue growth anticipated for cement companies.
Profitability likely to face challenges from rising costs.
Expected 6-7% increase in cement demand due to government spending.
EBITDA margins projected to ease by 1.2 percentage points .
Companies maintain 45 days of fuel inventory to mitigate cost impacts.
New Delhi, April 13 (NationPress) The leading cement manufacturers in India are projected to experience robust volume growth in Q4 FY26, fueled by an uptick in construction activities and increased government capital investments, according to analysts on Monday.
Motilal Oswal Financial Services anticipates a revenue increase of approximately 10 percent year-on-year and an EBITDA growth of around 4 percent across their cement coverage spectrum, as per various reports.
Despite this volume growth, profitability may face challenges due to escalating fuel and packaging costs stemming from the West Asian conflict. MOFSL predicts a 1 percent decline in profit after tax for Q4 FY26.
The brokerage projects that EBITDA per tonne will see a 6 percent year-on-year drop to about Rs 950, although it is expected to rise by 15 percent quarter-on-quarter due to operational leverage. Average EBITDA margins (excluding Grasim) are likely to decrease by 1.2 percentage points year-on-year, settling around 18 percent.
Analysts from Mirae Asset Sharekhan noted that pan-Indian prices increased by approximately Rs 7-10 per bag in January, Rs 2-3 in February, and Rs 4-5 in March, indicating a potential 1-3 percent year-on-year growth in realizations for the quarter.
Experts expect only a modest impact from rising petcoke and coal prices on quarterly earnings since companies have been utilizing lower-cost inventories. Nonetheless, power and fuel costs represent about 30 percent of production expenses, making them a critical factor to monitor if prices remain elevated.
In March, the average prices for imported petcoke and coal surged by about 15-20 percent month-on-month.
Firms typically maintain around 45 days of fuel inventory, which mitigates the immediate effects of rising energy costs on Q4 profitability; the full repercussions are expected to manifest in Q1 FY27.
A recent analysis highlighted that capital-intensive industries like cement and metals are poised to benefit from government infrastructure spending. Cement demand is anticipated to grow by approximately 6-7 percent, whereas steel demand is forecasted to increase by around 8 percent, it noted.
aar/pk
Point of View
It's evident that the Indian cement sector is on a growth trajectory, supported by government initiatives and robust demand. However, rising costs remain a significant concern that companies must navigate carefully to maintain profitability.
NationPress
1 May 2026
Frequently Asked Questions
What is the expected growth rate for India's cement industry in Q4 FY26?
Analysts predict a revenue growth of about 10 percent year-on-year and an EBITDA growth of approximately 4 percent.
How are rising costs affecting cement companies?
Profitability may face pressure due to increasing fuel and packaging costs, with a predicted 1 percent decline in profit after tax.
What is the outlook for cement demand in India?
Cement demand is expected to rise by about 6-7 percent, bolstered by government infrastructure spending.
