Cement prices, which remained broadly stable during the July-September quarter, began to recover towards the end of September as companies pushed through price hikes across markets, analysts said. The quarter, however, remained weaker than the preceding quarter on an average basis, with monsoon-related disruption and uneven demand limiting pricing gains. Pan-India average prices were 1-1.5% lower sequentially in Q2FY27, even as the quarter bucked the usual seasonal decline in cement prices.
The pricing trend turned positive in September. Pan-India average retail cement prices rose Rs 6-7 per bag month-on-month to around Rs 359, reaching a multi-quarter high, analysts said. The recovery was particularly pronounced in the non-trade segment, where prices increased by Rs 15-20 per bag with a more measured movement in trade prices.
Regionally, South India saw the sharpest increase in September, with prices rising around Rs 11 per bag on average. Andhra Pradesh saw a Rs 15 hike, while Karnataka, Tamil Nadu, Kerala and Telangana recorded Rs 10 increases. North India followed with a Rs 10 per bag increase, led by Rajasthan and Punjab, which saw Rs 10 hikes each, while Delhi rose Rs 5.
Central India saw prices increase by around Rs 5 per bag, with Madhya Pradesh recording Rs 5-10 increases and Uttar Pradesh seeing hikes of Rs 0-10. In eastern markets, prices also rose around Rs 5 per bag, led by West Bengal with a Rs 15 increase and Chhattisgarh with a Rs 10 hike. Bihar, Jharkhand and Odisha remained unchanged. West India saw the smallest increase of around Rs 4 per bag, with Maharashtra rising Rs 5-10 while Gujarat remained flat in September.
Analysts said higher input costs continue to make sustained price increases important for cement producers.
“We estimate industry profitability would decline by INR 250–300/t QoQ in Q2FY27E, primarily due to elevated fuel costs and weak operating leverage,” analysts from JM Financial said.
Analysts estimate that diesel prices were up around 9% year-on-year and 5% quarter-on-quarter, while international coal prices rose 39% year-on-year and international petcoke prices 34%.
“With petcoke prices rising sharply by 19% in past one month and limited cushion from lower-priced domestic coal, we expect variable costs to remain inflationary in Q3FY27, keeping near-term margin under pressure,” analysts from Elara Capital added.
Cement companies have announced further price hikes of Rs 10-20 per bag across most markets in October, with analysts expecting a Rs 5-15 increases in the first week of the month. Analysts said the extent to which these hikes are absorbed and sustained will be key to the sector’s margin recovery.