Cement Q4 Preview: Underlying Pricing Momentum Will Likely Herald A Margin Boost In Q1 FY26 — ICICI Securities

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ICICI Securities Report

Our December 2024 sector upgrade hypothesis, of a material reduction in industry-wide competitive intensity, is playing out well. While Q4 FY25 pan-India prices are estimated to have recovered further (by ~2% QoQ versus ~1.5% QoQ uptick in Q3 FY25), our latest channel-checks (for April 2025) suggest a strong likelihood of further price hikes across regions.

With Tamil Nadu formally notifying April 04, 2025 as the effective date for its mineral tax levy, a sharp price recovery is expected in South India with the industry’s likely endeavor to pass on the cost burden (Rs 160/tonne of limestone) to consumers.

Overall, pan-India realisations appear set to resume YoY growth Q1 FY26 onwards. Basis our estimate of ~7% YoY all-India demand growth, we see Q4 FY25 as a decent quarter with our coverage’s Ebitda expected to rebound 59% QoQ.

In our view, the underlying pricing momentum will likely herald a margin boost in Q1 FY26 – a catalyst that would bolster Street’s optimism on the sector. On balance, we stay Positive.

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