Cement prices have seen a notable increase across India in December, marking a shift after months of stagnation. The price hikes come amid a revival in demand from both the real estate and infrastructure sectors, with Western India experiencing the highest price increases, while other regions are also witnessing significant upticks.
Following a period of four to five months of flat pricing, which had put pressure on dealer margins and negatively impacted the profitability of cement companies, dealers across the country have implemented price hikes. Dealers attribute the price surge to a combination of factors, including increased demand from the real estate sector—boosted by better labour availability post-festive season—and a rise in orders from the infrastructure sector. In Western India, where cement prices are already among the highest in the country, dealers have raised prices by Rs 5-10 per 50 kg bag. This increase comes after a period of stagnant prices, with the new price range standing at Rs 350-400 per 50 kg bag, according to dealers and listings on various B2B platforms.
Meanwhile, the southern and eastern regions have experienced even larger price hikes, though the prices in these regions remain lower than those in Western and Northern India. In southern India, cement prices were increased by up to Rs 40 per bag, pushing prices to around Rs 320 per 50 kg bag, according to a large distributor in Chennai. Eastern India, too, saw price hikes after several months of stability, with prices rising by up to Rs 30 per bag, following a recovery in real estate and infrastructure activities post-festive season.
Dealers in Delhi have reported a Rs 20 per bag increase across all brands, with new prices ranging between Rs 340-395 per bag, depending on the quality and brand. In regions like Eastern India, the recovery of construction activity and infrastructure projects in states like Odisha and West Bengal has led dealers to raise prices to meet the demand. An InCred Equities report forecasts that cement prices will increase by Rs 10-15 per bag across all regions, as dealers anticipate a continuation of demand growth. Despite the uptick, analysts caution that severe price hikes might be difficult to implement due to the influx of new capacities coming online, as well as the larger cement manufacturers’ preference for boosting volumes and market share rather than raising prices.
However, the market is still in the process of absorbing these price hikes, and while September’s attempted price hikes failed to take hold, analysts believe the rise in government expenditure and the end of election-related disruptions may offer some support for future price stability. As cement prices rise across the country, this trend is expected to continue into the second half of FY25, with infrastructure development and increased capital expenditure by the government providing further momentum for the industry.
