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Informist, Friday, Sep 26, 2025

MUMBAI - Shares of cement companies are likely to see some correction in the near term due to muted demand and extended monsoon. Analysts tracking the sector said cement prices are unlikely to rise in the coming months, unlike what was expected earlier but companies will attempt to hike prices post Diwali. This is because demand is expected to pick up once monsoon season ends and the government's capital expenditure is anticipated to gain traction in the second half of 2025-26 (Apr-Mar). The GST on cement was reduced to 18% from 28% earlier, which analysts said will leave more room for companies to hike prices in the medium term. 

The September quarter earnings season is unlikely to give any major surprises for cement companies. Demand is likely to remain subdued during the quarter due to monsoon, festival season, no new construction on account of religious beliefs, sand mining issues, and some states being flooded due to continuous heavy rains, YES Securities said in its report Thursday. The broking firm estimates the cement volume to have declined 20-25% in September. 

YES Securities also said cement companies using more green energy and having lesser energy-cost inventory are likely to post better margins despite weak revenue growth. Diesel prices were stable at INR 90.54 per litre during the quarter, while the average international petcoke prices fell 4% on quarter to $121, it said. 

In terms of capacity, HSBC Securities and Capital Markets said cement capacity additions are expected to peak in FY26, which will support prices. "With cement prices already steady in a weak seasonal quarter, muted costs and our expectations of improving demand and pricing, we see sector margins set for recovery," it said in its report Friday. 

This week, shares of almost all cement companies plunged, mirroring the weakness in the overall equity market. Indian equities fell amid increasing pressure from US policies, the latest being a fresh 100% tariff on branded and patented pharma products from Oct 1. Pharma was among the very few sectors on which the US had not imposed any tariffs. The ripple effect was seen across sectors Friday as headline Nifty 50 and Sensex indices as well as all sectoral indices ended the session lower.  

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* GST Rejig: ICRA sees rural housing construction cost dn 1% on cheaper cement
* Moody's affirms UltraTech Cement's Baa3 ratings; outlook stable

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: 

End

Reported by Anjana Therese Antony
Edited by Akul Nishant Akhoury

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