Will Cement Prices Recover After Festive Softness as per Jefferies?
About the Cement Sector
India’s cement sector witnessed temporary price softness during the festive period and extended monsoons. According to Jefferies, the October decline of 1% month-on-month was seasonal, and the year-to-date FY26 price is still 5% higher YoY, outperforming earlier estimates of 4% for the full fiscal year.
October's price dip, while marginal, has raised questions about demand momentum. However, analysts note that the long-term growth story remains intact, supported by housing demand, infrastructure rollout, and government spending on roads and rural projects.
Financial Highlights of the Cement Sector (as per Jefferies)
| Metric | October 2025 | Change (MoM) | Change (YoY) |
|---|---|---|---|
| Average Cement Price | ₹389 per bag | -1% | +5% |
| QTD Price Change | -1.5% | — | vs +0.8% est |
| EBITDA Margin (Sector Avg) | 18.6% | -60 bps | +70 bps |
Average Price ₹389/bag shows a limited dip due to the overlap of festive discounts and subdued institutional demand. The correction is expected to reverse post-Diwali as construction activity resumes.
EBITDA Margin 18.6% indicates that producers continue to enjoy healthy profitability despite mild price pressure. Firms benefited from lower fuel and input costs this quarter.
QTD Price Change (-1.5%) suggests near-term weakness but does not reflect any structural issue. Analysts foresee a recovery as the dry season sets in and project tenders restart.
For traders monitoring short-term momentum shifts, tracking the Weekly Derivative View can provide precise market entry cues.
Peer Comparison (Top Cement Players)
| Company | EBITDA Margin | YoY Volume Growth |
|---|---|---|
| UltraTech Cement | 19.2% | +8% |
| ACC Ltd | 17.4% | +10% |
| Ambuja Cements | 18.0% | +6% |
Among peers, UltraTech continues to lead in efficiency, while ACC has seen a strong revival in volumes. Jefferies expects these majors to benefit from rising infra outlay and rural demand normalization.
Strengths
|
Weaknesses
|
The short-term pressure on prices does not alter the fundamental strength of the industry. Demand normalization and capex revival are expected to support volumes from Q4 FY26.
Opportunities
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Threats
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The balance of risks remains moderate, and Jefferies expects Q4 FY26 to mark the turnaround for pricing and margins. Cement companies with efficient distribution and rural exposure will outperform peers.
Valuation & Investment View
- Short-term: Cautious due to seasonal demand weakness.
- Medium-term: Stable margins with improving realizations expected in Q4 FY26.
- Long-term: Structural growth story intact; leadership stocks to benefit from infra upcycle.
Investors monitoring broader momentum may follow the Index Momentum Update for tactical allocation cues.
The sector’s long-term growth remains supported by robust fundamentals, efficient capacity additions, and government infrastructure initiatives.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, notes that the current cement price softness is temporary and offers entry opportunities for medium-term investors. As cost pressures ease and demand stabilizes, leading players like UltraTech, ACC, and Ambuja are well-placed for margin expansion. Explore more such insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Cement Sector Price Trends
- What Caused October’s Price Dip in Cement Stocks?
- Will Cement Demand Recover Post Festive Season?
- How Do Lower Energy Costs Impact Cement Margins?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
