Small and Mid-Sized Cement Firms Struggle as Market Giants Tighten Grip

There is a widening disparity in India’s cement industry between market leaders and their smaller brethren. Though larger players such as UltraTech and Ambuja Cement have reported steady revenue and volume growth, smaller companies like JK Cement, JK Lakshmi and Ramco Cement paid the price for third-quarter profitability in FY25.

Demand was weak in the October-December quarter and government spending on infrastructure remained sluggish, the review said, despite expectations for a post-monsoon recovery. Efforts to hike cement prices faced little success, resulting in lower realizations for the companies.

Ambuja Cement posted a standalone third-quarter EBITDA down 29% but consolidated EBITDA fell only 1.15%. UltraTech Cement and Shree Cement were also under pressure, with core profits falling by 7% and 23%, respectively, because of weak pricing.

Small players were even worse off. Operating profit at Ramco Cement dropped 27%, at JK Lakshmi 33% and at Dalmia Bharat 34.5% as they struggled to pass on rising costs to customers. While increased consumption in rural areas and demand for urban housing, as well as government spending, may support price growth in the months ahead, analysts warned that fierce competition could curb any significant gains in prices.

While companies endeavoured to raise prices across markets, oversupply and aggressive pricing strategies meant they were unable to maintain higher levels, Elara analyst Ravi Sodah said.

In this competitive environment, cost discipline remains a focus for industry leaders. Firms are aiming to find cost savings of ₹100-₹300 per tonne over the next few years. India’s Fourth-Biggest Cement Maker Cuts Hiring While Investing in Branding and Retail   Dalmia Bharat, India’s fourth-largest cement maker, is curbing hiring as it spends more on branding and retail distribution to shore up its market position. December saw some price improvement, which we expect to increase further in Q4, driven by strong demand,” Quin-En said. But competition might limit more sizable price increases,” CFO Dharmender Tuteja said.

At the same time, UltraTech, ACC, and Ambuja are rationalizing the costs of fuel, logistics, and raw materials. Expecting cement demand to expand at a healthy 7-8% CAGR till FY27, consolidation should be beneficial to industry leaders, providing them with cost advantages and pricing power.