Nirmal Bang expects the cement industry to deliver relatively stronger YoY volume growth in Q2 FY27, supported by a delayed monsoon and improved labour availability. However, gains are likely to be partly offset by flood-related disruptions in the East, the transition following new government formation and the onset of the Kharif season. Pricing remains relatively firm, with no correction from the Q1 FY27 exit level; in fact, all-India average prices have increased by ~Rs 11/bag MoM in Sep-26 and ~Rs 3/bag QoQ during Q2 FY27.
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Nirmal Bang Report
Nirmal Bang expects the cement industry to deliver relatively stronger YoY volume growth in Q2 FY27, supported by a delayed monsoon and improved labour availability. However, gains are likely to be partly offset by flood-related disruptions in the East, the transition following new government formation and the onset of the Kharif season.
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Pricing remains relatively firm, with no correction from the Q1 FY27 exit level; in fact, all-India average prices have increased by ~Rs 11/bag MoM in Sep-26 and ~Rs 3/bag QoQ during Q2 FY27.
While recent price hikes remain insufficient for full cost absorption, the brokerage expects limited margin pressure in Q2 FY27, supported by stable pricing and moderation in energy and packing costs during Jul-Aug '26.
Nirmal Bang expects its cement universe to report 8.5% YoY volume growth in Q2 FY27, albeit with an 8.1% QoQ decline due to seasonal factors. Realisation is expected to improve 2.1% YoY and 1.3% QoQ, supported by recent price hikes.
However, higher operating costs (+Rs 115/tonne QoQ) are likely to weigh on profitability, with Ebitda/tonne estimated at Rs 881, declining 2.4% YoY and 4.9% QoQ.
Ambuja Cements, Nuvoco Vistas, Birla Corp, and JK Lakshmi Cement are among Nirmal Bang's top picks in the sector.
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