India’s cement companies report healthy volume growth in the June quarter amid rising fuel and packaging costs, leading to continued pressure on profit margins despite increased demand.
India’s cement makers began the quarter with solid demand, but rising fuel and packaging costs kept a lid on profits, according to analysts tracking the sector. Business Standard said industry volumes rose 7% to 8% year on year in the June quarter, helped by steady construction activity and a later-than-usual monsoon, yet the improvement in sales did not translate into a matching lift in margins.
UltraTech Cement, Shree Cement, JK Cement and Dalmia Bharat all outpaced the wider market, while Ambuja Cements was the main laggard. Analysts quoted by Business Standard said Ambuja’s weaker performance reflected a deliberate reduction in non-trade exposure, exits from less profitable markets, slower ramp-up of acquired assets such as Penna and Sanghi and plant closures at ACC. Equirus Securities’ Raghav Maheshwari said the shift in Ambuja’s market share appears to have benefited peers, particularly Shree Cement, which posted stronger growth in its non-trade mix.
Among the large producers, UltraTech stood out. Capital Market Strategy analyst Akshay Shetty said its earnings before interest, tax, depreciation and amortisation per tonne rose 1.4% year on year to ₹1,214, supported by better pricing, scale, premium products and cost control. By contrast, Shree Cement, Dalmia Bharat, Ambuja and JK Cement all reported weaker Ebitda per tonne, with the declines ranging from about 13% to 25%.
Pricing improved only modestly across the sector. Crisil Intelligence’s Sehul Bhatt said realisations likely rose about 2% year on year, helped by a higher share of premium products, but that ex-GST cement prices were largely flat because competition remained intense. Maheshwari estimated realisations improved by about ₹200 a tonne quarter on quarter, with companies lifting prices in April before softening them in May and June. Even so, the gains were not enough to offset cost inflation.
Fuel was the biggest pressure point. Maheshwari said coal and petcoke prices had climbed 30% to 35% from their average Q3 FY26 levels, while power and fuel costs rose about ₹160 a tonne sequentially and packaging added roughly ₹70 a tonne. Crisil also pointed to higher limestone, gypsum, freight and energy costs, estimating industry margins narrowed by 180 to 220 basis points. Ambit Institutional Equities’ Satyadeep Jain said the West Asia conflict added another ₹150 to ₹170 a tonne in fuel and packaging costs in the quarter, with further pressure likely in the September quarter as monsoon volumes ease and operating leverage weakens.
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