India’s cement sector is on track to bounce back to its 10-year average profitability levels by FY26, thanks to rising demand and improved price realisations, according to a Crisil Ratings report. Following a subdued performance in FY25, the industry is expected to find renewed momentum, supported by growth in rural housing and tighter control over input costs, both of which are likely to drive margin recovery and improve overall financial health.
Leading cement companies are expected to deliver robust double-digit growth in both revenue and profit, as a combination of higher cement prices and increased sales volumes lifts performance. A wave of inorganic capacity additions is also projected to support about 10 percent YoY volume growth.
While volume growth may remain muted due to sluggish demand in urban pockets and high-cost inventory, companies are likely to benefit from consumer price hikes, which could help sustain revenue growth.
India’s top ten cement companies are expected to post a 43 percent jump in profitability for Q1, driven by stronger demand and lower input costs. The industry has also seen increased consolidation, thanks to aggressive acquisitions by heavyweights like UltraTech Cement, Ambuja Cement, and ACC, a move that has significantly boosted overall volumes.
According to analysts at Motilal Oswal, total cement volumes are projected to grow 10 percent YoY to 92 million tonnes in Q1 FY26, largely thanks to inorganic growth. However, on a comparable or organic basis, volume growth was more modest at around 4 percent YoY.
Blended realisation for cement companies is expected to rise by 4 percent to Rs. 5,565 per tonne year-on-year, as per analysts. The industry was able to implement price hikes during April and May, but these gains were partially rolled back in June due to the early onset of the monsoon.
Analysts estimate that EBITDA per tonne will rise by 29 percent YoY to Rs. 1,104, while average EBITDA margins are likely to expand by 3.7 percentage points, reaching around 20 percent.
As cement companies gradually shift towards more competitively priced green energy, they’re expected to see some relief in power and fuel costs. This move should help cushion the impact of rising raw material prices, which have gone up by Rs. 20–30 per tonne due to costlier inputs like limestone, fly ash, and slag, ultimately supporting overall profitability.
Despite ongoing challenges, the cement industry appears to be on a steady road to recovery. Backed by strong underlying demand and improved operational efficiency, the sector is expected to regain its financial strength and profitability in FY26.
Following are a few cement stocks to watch as the sector gears up for a strong profit rebound in Q1 FY26:
UltraTech Cement Limited
With a market cap of Rs. 3.69 lakh crores, the stock moved up by nearly 1.1 percent on BSE to Rs. 12,577 on Wednesday. For FY26, the company has outlined a capex plan of nearly Rs. 10,000 crore. Of this, around Rs. 7,000 crore is earmarked for ongoing expansion and strategic investments. With this, the company expects its domestic cement capacity to increase from 184 MT to nearly 212 MT, factoring in contributions from India Cements and Kesoram.
The capex will also support investments in waste heat recovery systems (WHRS), alternate fuels, and renewable energy projects, including a smaller allocation for the cable and wire segment. The company is targeting double-digit volume growth in FY26 through organic expansion, with additional upside expected from recent acquisitions.
Ambuja Cement Limited
With a market cap of Rs. 1.45 lakh crores, the stock moved up by nearly 1 percent on BSE to Rs. 595.9 on Wednesday. The company has set a capex guidance of around Rs. 9,000 crore for FY26, which includes about Rs. 6,000 crore dedicated to growth initiatives and another Rs. 2,500–3,000 crore aimed at improving operational efficiency.
As part of its long-term strategy, the company aims to reduce its production cost to Rs. 3,650 per tonne and achieve an EBITDA of Rs. 1,500 per tonne by FY28. Notably, this entire organic capex plan will be funded internally through existing cash reserves and operating profits, without any need for external financing.
Dalmia Bharat Limited
With a market cap of Rs. 41,032 crores, the stock moved up by nearly 2 percent on BSE to Rs. 2,187.6 on Wednesday. Dalmia Bharat is aiming for strong long-term growth, with plans to increase its production capacity at a CAGR of 14-15 percent over the next decade. The company is targeting a capacity of 75 million tonnes (MnT) by FY28, and further scale up to 110-130 MnT by 2031.
In FY25, its capex stood at Rs. 2,664 crore, with a capex guidance of around Rs. 3,500 crore for FY26. This will be directed toward expanding capacity at its Belgaum and Pune plants, establishing a new clinker line at Umrangso, acquiring strategic land parcels for future growth, and executing routine maintendfance and cost-efficiency upgrades. Dalmia is also focused on improving returns, with a targeted return on capital employed (ROCE) of 14-15 percent over the coming years.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
