Cement firms see Q2 growth, forecast better demand for rest of FY26

India’s leading cement manufacturers are optimistic about a stronger second half of FY26 after reporting healthy sales volumes and improved realisations in the July–September quarter. The upbeat outlook is supported by firm housing demand, stable input costs and renewed government thrust on infrastructure development.

UltraTech, Ambuja Cements, Shree Cement, Dalmia Bharat and Nuvoco Vistas posted revenue growth of up to 18% in Q2, driven by premium products, steady pricing and favourable market conditions. Companies said the demand momentum is expected to accelerate in the coming months, led by individual home builders (IHBs) across rural and urban regions, aided by a good monsoon, recent tax incentives and ongoing GST reforms.

Industry executives said GST reforms have also provided meaningful support to the sector by lowering the effective tax burden, improving input tax credit flow on raw materials and logistics, reducing state-level entry barriers, and enabling smoother, faster movement of goods. Uniform GST rates have also made pricing more transparent for customers, while rationalised GST on real estate has helped improve housing demand directly supporting cement consumption.

UltraTech, which recorded a 6.9% rise in consolidated sales volumes to 33.85 million tonnes, said rural housing continues to perform well, supported by improved incomes and monsoon-driven sentiment. The company also sees positive signals in urban markets due to changes in GST and income tax rates, alongside softer interest conditions that could boost construction activity.

Average cement prices across India rose 2% YoY in September to ₹341 per 50-kg bag, according to ICRA. For H1 FY26, prices were 6% higher YoY, though they witnessed a sequential drop due to monsoon disruptions and festive-season slowdowns. Fuel costs remained favourable: coal prices in October fell 17% YoY to USD 108/MT, while diesel rates were steady. Petcoke prices, however, increased 18% YoY. ICRA expects India’s cement volumes to grow 6–7% in FY26 to 480–485 million tonnes, supported by steady demand from the housing and infrastructure sectors.

Adani Group-owned Ambuja Cements, along with ACC and recently acquired Orient Cement, Sanghi Industries and Penna Cement, posted its highest-ever Q2 sales volume at 16.6 million tonnes, up 20% YoY, with revenue rising 21% to ₹9,174 crore. The company expects sectoral gains from GST 2.0 reforms and stronger investment sentiment, with overall annual demand growth projected at 7–8%. Shree Cement reported a 6.8% increase in Q2 sales volume and 17.4% revenue growth to ₹4,761 crore, noting broadly steady demand across states and expecting the northern and western regions to perform marginally better.

Dalmia Bharat anticipates a pickup in demand in H2, driven by improved sentiment, pent-up requirements and back-to-back good monsoons. The company reported a 10.7% rise in Q2 revenue to ₹3,417 crore and said the RBI’s proposal to allow external commercial borrowings for real estate could support cement consumption in the medium term. Nuvoco Vistas noted that Q2 demand was moderated by prolonged monsoon and festive holidays but highlighted substantial capex potential for the remainder of FY26, with only 38% of central and 21% of state government planned capex utilised as of August 2025.

With supportive policies, easing fuel costs and strengthening construction activity, cement makers expect the second half of FY26 to deliver stronger growth, underpinned by resilient housing demand and increased government infrastructure spending.