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Informist, Friday, Jun. 27, 2025

MUMBAI – Cement stocks are expected to remain subdued next week as monsoon-related disruptions have dampened construction activity across the country.

Cement prices have remained stable since last month, indicating slow movement of goods related to construction and infrastructure development. South Indian cement companies have rolled back the recent price hikes of INR 5–INR 10 per 50-kilogram bag, according to Prabhudas Lilladher, due to sluggish demand and the impact of the southwest monsoon.

In the short term, the sector is likely to face seasonal headwinds due to monsoon-related disruptions, which are expected to affect both demand and pricing. While 2025-26 (Apr-Mar) may mark a near-term peak in profit margins, the industry is entering a traditionally lean season. Investors may consider trimming exposure following the Apr-Jun earnings, according to Elara Securities.

Dalmia Bharat has announced an expansion project, adding six million tonnes of annual capacity in Belgaum, Karnataka, and Pune, Maharashtra, at an estimated cost of INR 35 billion. Completion of the project is expected by the end of 2026-27 (Apr-Mar), said Prabhudas Lilladher. The brokerage has maintained an 'accumulate' rating on the stock with a target price of INR 2,273.

Ambuja Cements announced Tuesday the commissioning of a 2.4 million tonne per annum brownfield expansion at its Sankrail unit in West Bengal, raising its total capacity to 102.95 million tonne per annum. The move is expected to positively impact the company's share price. UltraTech Cement commissioned a second cement grinding mill at its Maihar plant in Madhya Pradesh Thursday. Part of its ongoing expansion strategy, the new mill has an annual capacity of 1.8 million tonne per annum.

Demand trends remain uneven. After a soft April and a slight recovery in May, June has seen mixed momentum as monsoon rains disrupted construction across several regions. Delayed fund disbursements from state governments and higher input costs, particularly for materials such as bricks and sand, have weighed on demand sentiment. Going forward, industry players are sceptical about implementing any price hikes in July, focusing on maintaining current price levels, reported Elara Securities.

There has been a softening trend in June on the pricing front, according to Elara Securities. The pan-Indian average retail price of cement fell by INR 3 per 50-kg bag on a monthly basis to INR 376. South India saw the steepest decline of INR 10 per bag, followed by INR 6 in the east, and INR 1 in the west. Central India posted a slight INR 1 increase while prices in the north remained stable. However, this month's price correction is more moderate compared to the typical INR 6 per bag decline seen in the past three years during June.

Despite monthly weakness, cement prices rose 6% on year and 3% on quarter in Apr-Jun, supported by a low base in the previous year. On a two-year basis, however, the compound annual growth rate in pricing remains subdued at about 1%. Regionally, south India led gains with a 9% sequential price rise in the first quarter FY26, followed by 7% in the east. Central India recorded a 1% rise while the north and west remained flat.

Overall, the sector is entering a seasonally weak phase. Continued capacity addition is likely to keep utilisation levels in check. Given the expected short-term challenges, caution is warranted in the coming weeks from a market positioning standpoint, Elara Securities said.  End   

TOP HEADLINES-

* UltraTech Cement commissions second cement grinding mill at Maihar in MP
* Grasim says resin mfg block at Maharashtra plant starts commercial ops
* Ambuja Cements commissions capacity of 2.4 mln tn per year in West Bengal
* India Cements board OKs sale of entire stake in arm Industrial Chemicals

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

Reported by Ishaan Sharma

Edited by Subhojit Sarkar

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