Cement Companies Bet on Price Hikes to Revive Profitability in H2 as Costs Remain High

India’s cement manufacturers are looking to higher selling prices and a seasonal recovery in construction activity to improve profitability in the second half of the financial year, after six months marked by rising operating costs.

Cement prices have moved up since late September and are now around ₹15 to ₹20 higher per 50 kg bag than average levels in the September quarter. The increase offers producers some relief from higher fuel, power, freight and packaging expenses. Whether it improves margins will depend on how well prices hold as demand gathers pace.

The September quarter is usually a softer period for cement sales. This year, relatively weak monsoon rainfall across several parts of India allowed construction activity to continue for more days, helping prices remain stable. Producers are now looking towards the December and March quarters, when construction typically improves and government infrastructure spending can provide support.

Dalmia Bharat managing director Puneet Dalmia said price increases in September and October had helped recover part of the cost inflation. Nuvoco Vistas managing director Jayakumar Krishnaswamy said an average increase of about ₹20 per bag could offset cost increases and improve realisations in the December quarter, provided prices remain firm after Diwali.

UltraTech Cement has also indicated that prices strengthened during October, with further improvement possible over the next few months. The outlook matters in an industry where margins remain sensitive to fuel and logistics costs.

The pressure is visible in EBITDA-per-tonne comparisons.

The contrast highlights uneven performance across major producers. For most companies, September-quarter profitability was below the year-earlier level, with UltraTech among the exceptions.

The next two quarters will be crucial. Sustained prices, stronger construction demand and tighter cost control could support a recovery. But if demand weakens or input costs rise further, recent increases may not be enough to restore margins across the sector over coming months.