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Cement Demand Revives as Prices Fall in Q3; Profitability Outlook Improves

The cement sector experienced a revival in demand during Q3 of FY26, with volumes for major companies growing approximately 7% year-on-year. This growth occurred despite a 3% sequential correction in realisations, as non-trade prices fell across regions. Profitability, measured by EBITDA per tonne, increased 9% YoY to Rs 869, supported by savings in power and fuel costs. The outlook remains positive with anticipated healthy demand in Q4 and FY27, bolstered by increased government infrastructure spending.

Key Points: Cement Sector Q3FY26: Demand Up, Prices Down, Nuvama Report

  • Q3 demand revival with 7% YoY volume growth
  • EBITDA per tonne up 9% YoY to Rs 869
  • Non-trade prices corrected, then reversed in Jan 2026
  • Healthy FY27 demand forecast with infra capex boost
2 min read

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

Cement demand revived with 7% YoY volume growth in Q3FY26 despite price corrections. EBITDA per tonne rose 9% YoY. Outlook positive for Q4.

"We remain positive on the cement space - Nuvama Report"

New Delhi, February 18

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

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Reader Comments

P
Priyanka N
The report is optimistic, but I'm a bit concerned. The sequential fall in EBITDA per tonne shows how sensitive profits are to price cuts. Companies need to focus on long-term stability, not just quarterly volume spikes. Cost savings are good, but sustainable pricing is key.
A
Aman W
This directly impacts my work. We're a small contractor in Gujarat, and the price drop in Q3 was a relief. We could finally purchase in bulk for a pending project. If prices are rising again in Jan '26, we need to plan our purchases carefully. The government infra spending boost is a positive sign though.
S
Sarah B
Interesting analysis. The link between government capex and cement demand is very clear here. A 12% increase in infra spending is significant. It shows how crucial policy decisions are for core industries. Hoping the cost savings initiatives can counter the rising pet coke prices.
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Karthik V
Volume growth of 12% QoQ is impressive! It shows the underlying demand in the economy is strong. The price correction was a temporary phase. As a shareholder in a cement company, I'm glad to see the focus on cost efficiency. That's what will protect margins in the long run.
M
Meera T
The report mentions "pent-up demand". I think this is very true. So many housing projects were delayed due to high input costs. Now with prices softening, people are moving ahead. Hope the revival is real and not just a short-term bubble. The industry needs steady growth.

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