Cement manufacturers in India are likely to hike prices by ₹10 to 15 per bag starting mid-October to counter persistent input cost pressures, even as volume offtake registers steady growth, according to a research report released by Emkay Research.
“Given the onset of a busy season, a favourable demand-supply scenario, and based on our channel checks, there is a high probability of a ₹10- 15/bag price hike from 12-Oct,” the report stated.Delayed plant expansion programs across the sector also caused clinker utilization rates to rise toward 79% by the financial year 2028, balancing market fundamentals.
The report mentioned that companies executed rate adjustments of ₹10 to 15 per bag earlier in the first quarter, yet these adjustments fell short of compensating for higher power and fuel expenses. A monsoon-driven softening in prices during July and August further widened the deficit.
"Rising fuel costs have been a pain point for the sector since 6-7M, with brief relief in Jul26," the report highlighted.
"Industry volume offtake has been steady and is likely to see 7-8% yoy growth in 1HFY27, primarily driven by the non-trade segment," the report said.
It projected demand momentum to persist over the next year and a half, supported by key seasonal and pre-election infrastructure activities.
"Further, we expect demand intensity to be robust for the coming 18M, viz. 6M of busy construction season (2HFY27), followed by 12M (FY28) of high demand owing to the general elections in 1HCY29," the report noted, adding that the overall demand compound annual growth rate remains pegged at around 7% over the financial years 2026 to 2028.
"Elevated input costs (₹300-400/t) have been the industry’s pain point for the past 6-7M—full impact of this is likely to be seen in 2Q earnings, with a high probability of staying sticky in 2HFY27 too," the report said.
Spot quotations for petcoke and imported coal stand approximately 20% and 16% above their second-quarter averages at $175 per tonne and $150 per tonne, respectively. Packing expenses also climbed as polypropylene granule rates rebounded above ₹135 per kilogram.
"To offset the cost inflation (₹300-400/t), the industry will need another ~₹10/bag (~3%) of sustained price hikes; hence, Oct price hikes are crucial," the report emphasized.
Second-quarter earnings face an estimated sequential decline of ₹200 to 250 per tonne due to elevated fuel bills and negative operating leverage. - ANI
