India Cement Sector Shows Demand Revival With Softer Prices

India’s cement industry posted signs of renewed demand in the third quarter of financial year 2026, even as selling prices softened across key regions, according to a recent brokerage report. The mixed performance underscores both resilient construction activity and emerging cost pressures within a market that remains pivotal to the nation’s infrastructure and housing growth ambitions.

Data compiled for 15 leading cement companies revealed an approximate 7 % year-on-year increase in sales volumes for the October–December period, reflecting a rebound from earlier sluggishness in demand. This uptick came against the backdrop of a roughly 3 % sequential dip in average realisations, driven largely by corrections in non-trade pricing as regional markets absorbed excess supply.Improved volume performance has helped support profitability metrics, with earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne climbing nearly 9 % compared with the same quarter last year. That gain was attributed primarily to operational efficiencies, including fuel and power cost savings that have become a critical focus for producers navigating tight margins.

Nevertheless, the Q3 results also highlighted margin compression on a sequential basis, as lower average realisations weighed on earnings compared with the previous quarter. This dynamic reveals a sector at a strategic inflection point: demand stimulation through price adjustments can rekindle activity, but prolonged pricing pressure may erode pricing power if cost curves rise.Urban development and public infrastructure programmes remain central demand drivers. Construction cycles tied to affordable housing, urban transport networks and freight corridors have kept cement consumption buoyant, even amid broader cyclical pressures. Yet the pricing environment reflects not just demand dynamics but also competitive intensity, with regional supply conditions influencing how companies segment and price their offerings.

Looking ahead, the brokerage’s outlook suggests that cement demand will continue to strengthen into the fourth quarter of FY26 and carry momentum into the next fiscal year. This optimism is anchored in anticipated infrastructure spending increases in the Union Budget and seasonal demand pickup, although rising input costs — especially for energy — could moderate margin expansion.For city planners, real-estate developers and construction firms, the interplay between volume growth and pricing trends has tangible implications. Stable material availability and predictable cost structures are foundational to project planning, especially in urban environments where sustainable, long-term infrastructure and housing goals intersect with tight budgetary constraints.

As the sector settles into this transitional phase, the balance between demand stimulation and price stability will be key. Policymakers and industry stakeholders are now watching whether the broader economic push, including urban development incentives, can sustain cement consumption without triggering prolonged pricing volatility.

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India Cement Sector Shows Demand Revival With Softer Prices