Leading cement manufacturers reported a divergent set of earnings in the June quarter of FY27, with sales volume growth of up to 27 per cent across most companies, except second-largest maker Ambuja Cement, which reported a 14 per cent decline. According to reports from Business Standard and Moneycontrol, most companies reported double-digit sales growth, while profits came under pressure due to rising energy costs, subdued realisations and the lingering impact of geopolitical disruptions in West Asia. The quarter was characterized by stable cement demand, supported by infrastructure, housing, and construction activity, while profitability remained under pressure from higher imported fuel prices, elevated freight costs, and geopolitical developments in West Asia. As per PTI, capacity additions, market share gains and improved demand across key regions helped healthy volume growth, though elevated fuel and raw material costs weighed on profitability for several players.
UltraTech Cement reported a 17.23 per cent rise in consolidated net profit to ₹2,603.72 crore for the June quarter, on revenue from operations that grew 15.85 per cent to ₹24,648.20 crore. Its domestic sales volumes rose 13.1 per cent to 39.2 million tonnes. In contrast, Ambuja Cements reported a 36.6 per cent decline in profit after tax to ₹660 crore, as revenue fell 7.51 per cent to ₹9,474 crore. Its total sales volume dropped 14 per cent to 17.1 million tonnes during the quarter. As per Moneycontrol, CEO Vinod Bahety attributed the decline to calibrated reduction in exposure to the non-trade segment, exit from some low-profitability regions in the South and East, and delay in ramping up newly-acquired assets. Director Karan Adani emphasized the company's focus on avoiding low-return volumes, stating that producing cement at marginal EBITDA generally doesn't make sense. Nuvoco Vistas bucked the trend with a 19.87 per cent rise in consolidated profit to ₹159.63 crore, on the back of an 8.9 per cent rise in revenue to ₹3,128.71 crore, with consolidated cement sales volume rising 5 per cent year-on-year to 5.3 million tonnes.
According to an ICRA report cited by Business Standard, average prices increased by 4 per cent quarter-on-quarter to ₹350/bag, however, it remained 2 per cent lower than Q1 FY2026. Cement makers reported a rise in premium portfolio and improved their trade mix to enhance realisations, protect margins and offset rising fuel, freight and raw material costs. Shree Cement, the country's third-largest cement group by capacity, reported a 17.48 per cent decline in consolidated net profit to ₹531.12 crore, even as revenue from operations rose 18.03 per cent to ₹6,233.13 crore, with cement sales volume growing 17 per cent to 10.23 million tonnes. Dalmia Bharat's consolidated net profit fell 51.4 per cent to ₹192 crore, largely on account of exceptional items, even as revenue from operations rose 7 per cent to ₹3,890 crore. JK Lakshmi Cement and Birla Corporation also reported declines in net profit despite double-digit revenue growth, while ACC posted healthy profit growth alongside revenue increases. Latest JPMorgan dealer channel checks indicate price cuts of ₹5-15 per bag in the East with some dealers reporting cuts of ₹10-15 per bag for trade and ₹10 per bag for non-trade. Prices remained stable in the South and West, though one southern dealer noted current prices are close to February-March levels.
The latest data from Axis Securities reveals that blended price realizations rose 5% sequentially to ₹5,700 per tonne while cement volumes grew 8%, but production cost per tonne rose 11% sequentially and 5% year-on-year, dragging EBITDA per tonne down 7% sequentially and 16% year-on-year to ₹1,005. Power and fuel costs, which account for about 30% of the sector's total costs, were the main culprits due to supply-chain disruptions following the West Asia war. UltraTech Cement expects production costs to rise ₹130-140 per tonne sequentially, while Dalmia Bharat expects a ₹70-80 per tonne increase. According to India Ratings and Research, cement demand growth is expected to moderate to mid-single digits in FY27 from about 8% in FY26 amid inflationary pressures and the possibility of an El Nino weather event. The sector is likely to witness nearly 100 million tonnes of fresh capacity addition over FY26 and expects the capacity utilisation to be around 68-69 per cent in FY27. Crisil Ratings expects the operating margin of cement makers to reduce by ₹50-75 per tonne this fiscal (FY27) to ₹925-950 per tonne as against around ₹1,000 per tonne in fiscal 2026, with EBITDA per tonne may decline about 15% year-on-year in FY27. Despite current challenges, cement makers remain optimistic about FY27, with 7-8 per cent volume growth expected, though pricing power typically weakens during monsoon season. JPMorgan expects weak demand to eventually weigh on pricing, with potential price cuts emerging in September, similar to last year, while volume recovery could begin from November.
