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Cement Prices to Revive in Q4FY26, Industry Set for 9-10% Growth

Cement prices are anticipated to recover in the fourth quarter of FY26 after near-term softness, according to a report by Systematix Research. The industry is projected to grow by 9-10 percent in the current financial year, largely fueled by an acceleration in government capital expenditure. While Q3 prices faced pressure, especially in southern and eastern markets, lower power and freight costs are providing some offset. The medium-to-long-term outlook remains positive, supported by demand recovery and a market structure where large players control most capacity.

Key Points: Cement Sector Outlook: 9-10% Growth, Price Revival in Q4FY26

  • Price revival expected in Q4FY26
  • Industry growth forecast at 9-10% for FY26
  • Growth driven by government capital expenditure
  • Larger players to hold 65% of capacity
  • Near-term pricing pressures offset by lower costs
2 min read

Cement prices likely to revive in Q4FY26, industry to grow 9-10% in FY26: Systematix Research

Cement industry to grow 9-10% in FY26 with price recovery expected in Q4, driven by government capex and strong demand, says Systematix Research.

"Prices are expected to revive in Q4FY26. The industry is expected to grow by 9-10 per cent in this fiscal - Systematix Research Report"

New Delhi, January 8

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".

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.

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.

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.

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.

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

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Reader Comments

S
Sarah B
As someone following the construction materials market, this is a nuanced report. The short-term pain (Q3 price decline) is real, especially in the South. But the cost relief from lower fuel and freight is a silver lining for company margins.
A
Arjun K
Good analysis. The consolidation mentioned is important - big players controlling 65% capacity means they can manage supply better. But I hope this doesn't lead to an oligopoly where consumers end up paying more in the long run.
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Priya S
Planning to start construction on our house in Gujarat next year. Hearing that prices in the West are stable for now is a relief! Hopefully the predicted revival in Q4 doesn't mean a sudden spike when we start buying. 🤞
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Vikram M
The report is optimistic, but let's be practical. "Anticipated" and "expected" are the key words. Government spending plans look good on paper, but timely execution on the ground is what will actually drive this 9-10% growth.
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Karthik V
The regional price variation is interesting. Southern market correction of 2-3% is significant. Might be a good time for builders in Tamil Nadu or Karnataka to lock in some contracts before the Q4 revival.

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