The Indian cement industry is set for 9-10% growth this fiscal, with prices expected to revive in Q4FY26, a Systematix Research report said. The outlook is positive long-term, driven by government capex, despite near-term price softness.
Cement Price and Growth Forecast
Cement prices are expected to see a revival in the fourth quarter of FY26, while the overall cement industry is likely to grow by 9-10 per cent in the current financial year, highlighted a report by Systematix Research.
According to the report, the near-term outlook for cement prices remains soft, but a recovery is anticipated towards the end of the fiscal. It stated "Prices are expected to revive in Q4FY26. The industry is expected to grow by 9-10 per cent in this fiscal".
Government Spending to Drive Demand
Despite some short-term challenges, the report remains positive on the cement sector from a medium-to-long-term perspective, supported by improving demand conditions and a likely pick-up in government spending. It noted that the industry's growth in FY26 is expected to be driven largely by an acceleration in both central and state government capital expenditure. The capex cycle is anticipated to gather momentum, which would provide a key demand push for cement consumption across infrastructure and housing projects.
Large Players to Dominate Market
The report also highlighted that larger cement players are expected to account for nearly 65 per cent of the total industry capacity, putting them in a stronger position to benefit from the anticipated demand recovery.
Q3 Pricing Pressures and Cost Relief
During the third quarter, the report stated that the cement prices remained under pressure. The report expects an average decline of 1.7 per cent quarter-on-quarter in realisations. Regionally, prices in the southern market witnessed the steepest correction, falling by around 2-3 per cent QoQ, followed by the eastern region. In contrast, prices in the western, northern and central regions remained largely stable during the period.
However, the report pointed out that the impact of softer pricing is likely to be partly offset by lower power and fuel costs, along with a reduction in freight expenses.
Robust Financial Growth Expected
For the third quarter of FY26, the brokerage has factored in robust growth across key financial metrics for its coverage universe. It expects volume growth of 10.5 per cent year-on-year, revenue growth of 9.7 per cent, and a sharp 29 per cent growth in profit after tax on a YoY basis.
Constructive Long-Term Outlook
Overall, while near-term pricing pressures may persist, the report believes the cement sector's medium-to-long-term outlook remains constructive, supported by demand recovery, cost tailwinds and a favourable industry structure led by large, efficient players. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)