Concrete

Cement Margins Seen Rising 12–18 per cent in FY26

Healthy demand and GST cut to boost cement profits per tonne.

Published

12 months ago

September 29, 2025

admin

Cement companies’ operating profit for fiscal year 2026 (FY26) is projected to grow by 12–18 per cent, reaching Rs 900–950 per metric tonne (MT), supported by robust demand, improved realisations, and stable input costs, according to ratings agency Icra.

In FY25, operating profit before interest, depreciation, tax and amortisation (OPBIDTA) stood at Rs 806 per MT, declining 16 per cent year-on-year due to weak realisations amid an extended monsoon and subdued government capital expenditure during the general elections.

Icra’s sample covers ACC, Ambuja Cements, JK Cements, JK Lakshmi Cement, The Ramco Cements, UltraTech Cement, Dalmia Bharat, Birla Corporation, Shree Cement, Sagar Cements, and Heidelberg Cement India, which together account for 74 per cent of industry capacity.

The recent GST cut on cement is expected to lower rural housing construction costs by 0.8–1.0 per cent, boosting volumes and supporting additional capacity. Average cement realisations are expected to rise 3–5 per cent in FY26.

Cement volumes increased by 8.5 per cent in the first five months of FY26, driven by strong demand from housing and infrastructure projects, despite early monsoons in some regions. During this period, cement prices rose 7.4 per cent year-on-year, particularly in northern and eastern markets. Input costs, especially for pet coke and freight, remain sensitive to global crude price movements and geopolitical factors.

Anupama Reddy, vice-president and co-group head of corporate ratings at Icra, said: “With the GST rate cut from 28 per cent to 18 per cent expected to be passed on to consumers, the average retail price of cement, currently Rs 350–360 per bag, will offer savings of Rs 26–28 per bag. Driven by strong demand, capacity additions may rise to 41–43 million metric tonnes per annum (MMTPA) in FY26 from 31 MMTPA in FY25, with the eastern region leading the growth in grinding capacity.”

Up Next

Nuvoco Vistas Celebrates Gujarat’s Heritage with “Sauthi Khaas Garba”

Don't Miss

Adani’s Strategic Emergence in India’s Cement Landscape

Concrete

Cement Firms to Invest Rs. 130 bn in Green Energy by FY28

Cement companies plan to expand clean energy capacity to 6 GW by FY28

Published

2 days ago

September 17, 2026

admin

India’s major cement companies are set to raise their clean energy capacity to 6 GW by March 2028 from around 4 GW at the end of March 2026, according to ratings agency ICRA. The planned expansion is expected to involve investments of Rs. 130 bn over the next two years.

The additional capacity could generate annual savings of Rs. 62 bn to Rs. 67 bn, resulting in an estimated payback period of 1.8 to 2.2 years. Cement is an emission-intensive industry, and leading producers have established net-zero roadmaps covering the next 15 to 20 years.

The calcination process accounts for 57 to 60 per cent of the sector’s total emissions, while fuel combustion contributes 27 to 30 per cent and electricity consumption accounts for 10 to 13 per cent. ICRA said the figures highlighted the need for a broad decarbonisation strategy involving green power, blended cement, alternative fuels and improvements in clinker efficiency.

Green energy is considered one of the most commercially attractive decarbonisation options because it can reduce emissions while lowering operating costs. Every 5 per cent increase in green power replacement can reduce power and fuel costs by Rs. 15 to Rs. 16 per tonne. A 25 per cent replacement level could therefore save Rs. 75 to Rs. 80 per tonne and expand operating margins by 140 to 160 basis points.

Cement producers are also assessing carbon capture, utilisation and storage, although high implementation costs, energy requirements and limited transport and storage infrastructure are expected to slow commercial adoption. The government has proposed Rs. 200 bn over five years to support deployment across key sectors. Meanwhile, companies are targeting thermal substitution rates of 10 to 15 per cent over the next three to five years, compared with the current industry level of around 6 per cent.

Concrete

Centre Defers Clearance for Limestone Mine Near Bustard Habitat

Panel seeks revised mining plan and safeguards for pipelines and wildlife

Published

3 days ago

September 16, 2026

admin

The Centre has deferred environmental clearance for a proposed limestone mine near a Great Indian Bustard habitat in Ramgarh, Rajasthan’s Jaisalmer district. The critically endangered species has an estimated wild population of about 130 in India.

Concrete

Telangana to Supply Subsidised Cement for Indiramma Houses

Poor families allotted Indiramma houses to receive cement at Rs. 230 per bag

Published

3 days ago

September 16, 2026

admin

The Telangana government will supply cement at a subsidised price of Rs. 230 per 50-kg bag to poor and low-income families allotted Indiramma houses. The prevailing market price is between Rs. 310 and Rs. 320 per bag, the Assembly was informed on Thursday.