Cement companies likely to see steady growth in Q4 FY26

India’s cement companies are expected to post healthy volume growth in Q4 FY26 on strong construction demand and government spending, though rising fuel and packaging costs may keep profitability under pressure, analysts said

New Delhi: India’s top cement companies are expected to record healthy volume growth in the Q4 FY26, driven by stronger construction activity and government capital spending, analysts said on Monday.

Motilal Oswal Financial Services forecasted about 10 per cent year‑on‑year growth in revenue and around 4 per cent growth in EBITDA for their cement coverage universe, according to multiple reports.

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Even amidst volume growth, profitability is likely to remain under pressure over rising fuel and packaging costs due to West Asian conflict, as MOFSL estimated profit after tax likely to slip around 1 per cent in Q4 FY26.

The brokerage estimated EBITDA per tonne fell about 6 per cent YoY to around Rs 950, even as it rose about 15 per cent quarter‑on‑quarter on operating leverage. Average EBITDA margins (excluding Grasim) are expected to ease about 1.2 percentage points year‑on‑year to about 18 per cent.

Analyst at Mirae Asset Sharekhan said that pan-Indian prices rose around Rs 7-10 per bag in January, Rs 2-3 per bag in February, and Rs 4-5 per bag in March, translating to an expected 1-3 per cent Y-o-Y growth in realisation during the quarter.

Experts forecasted only a moderate impact of higher petcoke and coal prices on quarterly earnings, as firms continued to draw from lower-cost inventories. Nevertheless, power and fuel costs account for around 30 per cent of production costs, making them a key monitorable if prices continue to remain higher, they said.

Imported petcoke and coal prices rose about 15–20 per cent month-on-month (M-o-M) in March on average.

Companies typically maintain around 45 days of fuel inventory, limiting the immediate impact of rising energy costs on Q4 profitability and the full impact will only be felt from Q1 FY27 onwards, they added.

A recent report had said that capital‑intensive sectors such as cement and metals should gain from government’s infrastructure spending. Total cement demand is expected to rise about 6–7 per cent and steel demand roughly by 8 per cent, it noted.