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Cement Sector: Considerable improvement in operational performance on QoQ basis

ICICIdirect Research 17 Apr 2026 DISCLAIMER

Cement sector is likely to report healthy volume growth (+9–10% YoY) in Q4FY26, supported by healthy demand led by pick-up in construction activities in Q4. Sequentially, aggregate volume growth is expected at ~9%. Full year industry volume growth stood at 7-8% YoY- FY26

Cement prices also witnessed some improvement during the quarter after seeing subdued pricing in the last 2 quarters. We expect ~Rs 70/ton sequential improvement in average realisation (~2% QoQ). However, average realisation is expected to be lower by ~5% on YoY basis (as prices remained lower as compared to higher prices in Q4FY25)

Overall EBITDA/ton is expected at Rs 1035/ton (lower by ~7% YoY due to lower realisations). However, EBITDA/ton is expected to improve by ~20% on QoQ basis, led by pick-up in realisations and positive operating leverage.

Though the overall cost has increased by Rs 200-300/ton (due to increase in fuel prices and packaging cost), its impact will be visible in Q1FY27E

Overall outlook remains constructive on cement sector considering the healthy demand and pricing scenario. Demand growth is expected to remain healthy at 7-8% over the next 3-4 years. Cement companies have already planned to pass on the cost increase by taking price hikes (Rs 15-20/bag from April 2026). We believe that overall operational performance to improve over FY27-28E, further led by continuous focus on operational efficiencies.

Stocks Preferred – Ultratech Cement, Dalmia Bharat, JK Cement

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