Cement makers upbeat on Q2 sales growth, expect second half of FY26 to be better

New Delhi: India’s leading cement manufacturers expect a stronger performance in the H2 of FY26, supported by high single-digit volume growth in the Q2 FY26, firm sales realisation, and improving demand from the housing and infrastructure sectors. UltraTech, Ambuja Cements, Shree Cement, Dalmia Bharat and Nuvoco Vistas posted revenue growth of up to 18 per cent in Q2, driven by premiumisation, benign input costs and steady pricing.

Coal prices declined and diesel rates remained broadly stable year-on-year, even though petcoke costs rose. In their earnings calls, companies said they are optimistic about H2 demand, particularly from the Individual Home Builders (IHB) segment across rural and urban markets. A good monsoon, tax incentives and GST reforms are expected to support rural construction activity.

UltraTech, which reported about 13 per cent growth in rural markets, expects the IHB segment to remain a major demand driver. The company said new infrastructure project announcements continue to boost sentiment. Managing Director Kailash C Jhanwar said the housing sector—especially rural housing—would remain the key growth engine, helped by favourable monsoon conditions and better farm incomes following MSP revisions. UltraTech also sees improving urban demand due to changes in GST rates, personal income tax tweaks and softer interest rates. Its consolidated sales volume rose 6.9 per cent in Q2 to 33.85 million tonnes.

According to ICRA, the all-India average cement price increased 2 per cent YoY in September 2025 to Rs 341 per 50-kg bag. In H1 FY26, prices were up 6 per cent YoY at Rs 346 a bag, though they dipped 3 per cent QoQ due to monsoon and festive disruptions. In FY25, prices had fallen 7 per cent YoY to Rs 338 a bag.

Coal prices in October 2025 were down 17 per cent YoY at USD 108/MT, while petcoke prices jumped 18 per cent YoY to Rs 12,000/MT. Diesel prices stayed at Rs 88 per litre. For the first seven months of FY26, coal prices were lower by 12 per cent YoY, petcoke prices higher by 3 per cent, and diesel broadly flat. ICRA expects cement volumes to grow 6–7 per cent YoY to 480–485 million tonnes in FY26, supported by sustained demand from housing and infrastructure.

Ambuja Cements CEO Vinod Bahety said the sector will benefit from favourable policy initiatives, including GST 2.0 reforms, despite monsoon-related headwinds. He expects cement demand to remain “bullish”, projecting industry growth of 7–8 per cent for the year, backed by improved economic sentiment and strong public and private investments. Ambuja Cements reported its highest-ever Q2 sales volume at 16.6 million tonnes, up 20 per cent YoY. Revenue rose 21 per cent to Rs 9,174 crore, with a 3 per cent price gain.

Shree Cement Managing Director Neeraj Akhoury said demand growth was largely uniform across regions, though some states performed better than others. He expects this pattern to continue, with northern and western regions likely to outperform. Shree Cement’s Q2 sales volume rose 6.8 per cent YoY, while revenue increased 17.43 per cent to Rs 4,761 crore.

Dalmia Bharat MD & CEO Puneet Dalmia said the second half should see improved momentum driven by better customer sentiment, pent-up demand and successive good monsoons. He added that the RBI’s move to potentially permit ECBs for the real estate sector could bolster medium- to long-term cement demand. The company posted a 10.68 per cent rise in revenue to Rs 3,417 crore.

Nuvoco Vistas MD Jayakumar Krishnaswamy said Q2 saw moderate cement offtake due to intense monsoon conditions and the festive season. However, he expects a recovery in H2 as significant central and state capex allocations remain unspent, indicating strong construction activity ahead.