NewKerala.com

Key Points

The Indian cement sector is showing signs of recovery as demand and prices rise, according to Nuvama Research. Southern markets led price hikes in May, supported by improving government capex. While FY25 saw slower growth, states plan higher spending for FY26 to sustain demand. Analysts expect momentum to continue but warn of potential price rollbacks.

Key Points: Cement Sector Outlook Brightens as Demand Prices Rise Nuvama

  • Southern region leads cement price hikes in May 2025
  • Government capex recovery boosts demand despite slow FY25 growth
  • Major states plan higher FY26 spending to sustain momentum
  • Dealers expect partial rollback of recent price increases
2 min read

Cement sector outlook brightens as demand, prices improve: Nuvama Research

Nuvama Research reports improving cement sector outlook with rising demand and prices, supported by government capex and regional market trends.

"We believe the outlook for the cement space is improving as both volumes and prices are likely to log an uptick - Nuvama Research"

New Delhi, May 20

The outlook for the Indian cement sector is improving as both demand and prices are likely to rise in the coming months, according to a report by Nuvama Research.

The report highlighted that the sector may benefit from a low base in FY25 and better demand conditions going forward.

It said, "We believe the outlook for the cement space is improving as both volumes and prices are likely to log an uptick going ahead, aided by a low base of FY25E".

In May 2025, cement prices saw an increase across all regions, with the southern region leading the trend, followed by the eastern, central, and western markets. This price hike was mainly driven by an improvement in demand.

However, the report also noted that dealers expect a partial rollback of the recent price increases towards the end of May.

The improvement in demand has been supported by increased capital expenditure (capex) by both the central and state governments.

Although central government capex was down 12 per cent year-on-year in the first eight months of FY25, it recovered and grew by 8 per cent for the full financial year.

Similarly, state government capex rose by 9 per cent in FY25. Several major states have also planned higher capital spending for FY26, which is expected to support cement demand further.

The report mentioned that cement demand was relatively weak in April 2025 after strong performance in the fourth quarter of FY25. Capital spending, which was subdued during the first nine months of FY25, picked up significantly in the final quarter.

However, for the full year, capex growth remained lower compared to previous years. Central government capex grew only around 8 per cent in FY25, down from over 20 per cent growth seen in FY23 and FY24.

State government capex also slowed to 9 per cent in FY25, compared to 27 per cent growth in FY24.

Data from eight key states shows that, with the exception of Maharashtra, all have budgeted higher capex for FY26, ranging from 12 per cent to 69 per cent.

Meanwhile, data from the Department for Promotion of Industry and Internal Trade (DPIIT) showed that the index of eight core industries recorded a marginal recovery, rising about 4 per cent year-on-year in March 2025. However, the growth still remains weak compared to previous years.

Overall, Nuvama Research expects the cement sector to gain momentum in the coming quarters, supported by improving demand and better pricing.

- ANI

Share this article:

Reader Comments

R
Rahul K.
Good news for our infrastructure sector! 🚧 With state governments increasing capex, this should create more jobs in construction too. Hope the price hikes don't hit common people too hard though - affordable housing needs affordable cement.
P
Priya M.
Southern states leading in price hikes again? Not surprising given the construction boom in Bangalore and Hyderabad. But dealers expecting rollback shows market is still unstable. Government should monitor this closely to prevent artificial price inflation.
A
Amit S.
As someone building a house in Noida, these price fluctuations are worrying 😅 Just last month the contractor increased estimate due to cement costs. Hope the FY26 capex plans stabilize prices. Good that states are investing more - UP needs better infrastructure!
S
Sunita T.
The report mentions Maharashtra hasn't budgeted higher capex - concerning given Mumbai's infrastructure needs. Otherwise positive outlook overall. Cement companies should pass some benefits to consumers if demand is improving.
V
Vikram J.
Interesting to see eastern markets showing price growth - probably reflects development in Odisha and West Bengal. But 8% central capex growth is disappointing after 20%+ earlier years. Need more consistency in infrastructure spending.
N
Neha P.
Hope the cement companies invest some profits in greener technologies. India's construction boom is good, but we can't ignore environmental costs. Maybe government should link capex approvals to sustainable practices in cement production.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50