India’s leading cement companies are anticipated to experience significant volume growth in the fourth quarter of the fiscal year 2026, driven by increased construction activity and government spending, analysts revealed. Motilal Oswal Financial Services has projected a 10% year-on-year revenue growth and approximately 4% growth in EBITDA for their cement coverage universe. Despite the growth in volume, profitability may face challenges due to escalating fuel and packaging costs stemming from the West Asian conflict, with profit after tax estimated to decline by around 1% in Q4 FY26.
The brokerage firm estimated that EBITDA per tonne dropped by about 6% year-on-year to approximately Rs 950, although it saw a 15% quarter-on-quarter increase due to operating leverage. Average EBITDA margins (excluding Grasim) are expected to decrease by about 1.2 percentage points year-on-year to around 18%. Analysts at Mirae Asset Sharekhan noted that pan-Indian cement prices saw increases of around Rs 7-10 per bag in January, Rs 2-3 per bag in February, and Rs 4-5 per bag in March, leading to an anticipated 1-3% year-on-year growth in realisation during the quarter.
Experts foresee only a moderate impact on quarterly earnings from the higher prices of petcoke and coal, as companies have been utilizing lower-cost inventories. However, since power and fuel costs constitute approximately 30% of production expenses, they remain a crucial factor to monitor if prices continue to rise. Imported petcoke and coal prices surged by about 15–20% month-on-month in March on average.
Typically, companies maintain around 45 days of fuel inventory, which helps limit the immediate impact of rising energy costs on Q4 profitability. The full impact is expected to be felt starting from the first quarter of the fiscal year 2027. A recent report highlighted that capital-intensive sectors like cement and metals are poised to benefit from the government’s infrastructure spending, with total cement demand projected to increase by about 6–7% and steel demand by roughly 8%.
