Real Estate

Cement Companies Expect Costs, Muted Demand to Dent Growth

  • by- Zaid
  • May 13, 2026
Indian cement companies revise growth expectations downward due to higher fuel, packaging and logistics costs. Demand expected to slow to 5-7% from 8-9% in FY26.
Cement Companies Expect Costs, Muted Demand to Dent Growth

Mumbai, May 13: Indian cement companies are revising growth expectations downwards. Higher fuel, packaging, and logistics costs are impacting profitability. Companies anticipate a slower demand increase this fiscal year, with the West Asia crisis and monsoon forecasts as key concerns.

Operating Profit Impact

Companies have guided for a 15-20 per cent hit on operating profit per tonne due to higher costs of fuel, packaging material, increased logistics charges, and the impact of a weaker rupee. The five largest cement companies - UltraTech Cement, Adani Cement, Shree Cement, Dalmia Bharat, and Nuvoco Vistas Corp - expect on average an impact of about ₹150 per tonne on operating profit in the current quarter.

Executive Comments on Cost Pressures

Neeraj Akhoury, managing director of Shree Cement, said, "The geopolitical conflict in the Middle East and forecast of moderate monsoon conditions may act as headwinds for the sector and may impact its growth momentum in the short-term." Puneet Dalmia, MD of Dalmia Bharat, noted, "Supplier crunch of bags and rising cost of PP granules have led to an increase in packing costs. Fuel costs have also gone up."

Price Hikes and Persistent Gaps

While cement makers continued to raise prices in both April and May, it may not be enough to mitigate total cost increases. Prices were raised by around ₹20 per 50 kg bag in April, with another round of ₹10-15 per bag in May. Jayakumar Krishnaswamy, MD of Nuvoco Vistas Corp, said, "I am really looking at a cost inflation of close to ₹200 per tonne. With the kind of price increase, net of GST, there is still going to be some gap."

Capacity Expansion Delays

Adani Cement, the country's second largest producer, has pushed back its target of 155 million tonne production capacity. CEO Vinod Bahety said, "The target plans of FY28 could move a year or two. On a safer side, I would say FY30." The operating profit per tonne was at a three-quarter high in the March quarter, reflecting recent upticks in cement prices.