Cement sector demand revives as prices decline in Q3FY26: Nuvama report

New Delhi [India], February 18 (ANI): Demand revived as prices declined in the cement sector as the third quarter of the financial year 2026 presented a mixed performance for major players. According to a report by Nuvama, the industry saw an improvement in demand traction with volumes rising approximately 7 per cent year-on-year for 15 major companies.
The growth occurred despite a sequential correction in realisations, which inched down 3 per cent as non-trade prices corrected across various regions.
The report noted that EBITDA per tonne increased 9 per cent year-on-year to Rs 869 during this period. This performance was largely supported by substantial savings in power, fuel, and other operational expenses.
However, on a sequential basis, the EBITDA per tonne fell 7.5 per cent due to the downward trend in realisations. For the full fiscal year 2026, the industry volume growth is likely to settle at approximately 5 per cent.
Demand gained traction significantly in the third quarter, with the 15 major companies reporting a volume growth of 12 per cent on a quarter-on-quarter basis.
The report highlighted that the price correction observed in October and November 2026 is primarily due to subdued demand. This pressure on non-trade prices causes the gap between trade and non-trade segments to widen.
However, a reversal of these cuts is visible in early 2026. Non-trade prices improve by Rs 15-20 per bag across regions in January 2026, effectively reversing the price cuts reported in the third quarter. The industry anticipates further improvement in pricing as demand remains healthy in the fourth quarter.
Looking ahead, the report states, "We remain positive on the cement space". Competitive intensity is expected to determine future stock performance. Nuvama forecasted that the fourth-quarter volumes will report an uptick due to pent-up demand and a rise in government spending.
"We forecast demand shall be healthy in FY27E with total infra capex in the recent Union Budget up 12% over FY26 revised estimate (RE) and 10% compared with FY26 budgeted estimate (BE). With pet coke prices rising, the impact on power and fuel costs shall be seen in Q1FY27; however, various cost savings initiatives by players would help in keeping costs under control," the report said.
Recent price hikes and cost efficiency measures are projected to aid profitability for the sector. (ANI)