Cement prices unlikely to recover until Q4, says brokerage; names UltraTech, Ambuja as its top picks

Cement

Cement prices in India are unlikely to recover until the seasonally strong January-March quarter (Q4 FY26) as the cement players face a mixed demand situation, analysts at brokerage Systematix said.

The brokerage however remained positive for the sector from a medium-to-long term perspective despite some "near-term hiccups".

Pan-India cement prices have dropped month-on-month in November, Systematix said, adding that a rebound is expected to be seen only from January 2026 onwards. It noted that cement prices rose year-on-year due to a low base, but were flattish quarter-on-quarter in Q2 FY26.

Systematix noted that channel checks indicate a "mixed demand environment" for the cement sector, with southern region seeing the weakest demand. Western markets see slight uptick, while halted construction activities amid elevated air pollution levels in North India softened demand, the brokerage added.

UltraTech Cement, Ambuja Cements and Nuvoco Vistas are Systematix's top pics in the space.

JM Financial says recovery appears challenging:

Meanwhile, another domestic brokerage JM Financial noted that the pan-India average cement prices have declined approximately 1 percent month-over-month to Rs 336 per bag in November. Regionally, prices fell nearly 1–2 percent sequentially across all markets.

"Pan-India industry volume likely grew in high single digits YoY in Nov’25, aided by a favourable base and festive season shifts. However, demand for Oct–Nov combined appears to have grown only in mid single digits YoY. Demand in a few pockets remained slightly soft due to the Bihar elections, construction restrictions in Delhi related to pollution, lower labour availability, and the busy marriage season," the domestic brokerage said.

JM Financial said that the cement industry typically sees a sequential improvement in profitability in Q3, but this time the recovery appears challenging. This could be due to weaker cement prices, rising input costs along with rupee depreciation, and a gradual demand recovery.

"Any rebound in cement prices will be a key monitorable in the coming months," it said, while naming UltraTech as its top pick among the large-caps and JK Cement among the mid-caps.

UltraTech Cement shares closed in the green with marginal gains, rising 0.08 percent to Rs 11,600 apiece. Ambuja Cements also closed marginally higher at Rs 537.15 apiece.