UltraTech Cement, Shree Cement, JK Cement and Dalmia Bharat outperformed the industry, while higher fuel, packaging and input costs limited profit growth.
NEW DELHI: India’s leading cement companies recorded healthy growth in sales volumes during the first quarter of fiscal 2027, but rising fuel, packaging and other input costs put pressure on profitability.
According to analysts, the cement industry recorded an average 7-8% year-on-year growth in sales volumes during the quarter. Major players including UltraTech Cement, Shree Cement, JK Cement and Dalmia Bharat performed better than the overall industry.
However, the increase in costs offset much of the benefit from higher cement prices, limiting the improvement in profitability.
Ambuja Cement Reports Weak Sales Performance
Ambuja Cement was the only major company to underperform during the quarter.
Analysts attributed the decline primarily to the company’s strategic decision to reduce its share of the non-trade segment and exit certain low-margin markets. This affected its sales mix, particularly in the southern and eastern regions.
According to Raghav Maheshwari, Assistant Vice President at Equirus Securities, delays in scaling up operations at the acquired Penna and Sanghi assets, along with the closure of some ACC plants, also contributed to Ambuja Cement’s weaker sales performance.
Maheshwari said Ambuja’s loss of market share could benefit other major cement manufacturers and support their volume growth. He particularly highlighted Shree Cement, where the non-trade segment reportedly increased by around 8%.
The industry’s sales growth was supported by continued construction activity and a delayed monsoon, although the strong increase in volumes did not translate into a proportionate rise in profits.
UltraTech Cement Leads Among Major Players
According to Akshay Shetty, Research Analyst at Capital Market Strategy, UltraTech Cement delivered the strongest performance among the major cement companies.
The company’s EBITDA per tonne increased 1.4% year over year to ₹1,214, supported by higher revenue, operating scale, premium products and cost-saving measures.
In contrast, EBITDA per tonne declined sharply for several other companies:
- Shree Cement: Down approximately 25%
- Dalmia Bharat: Down approximately 16%
- Ambuja Cement: Down approximately 13%
- JK Cement: Down approximately 20%
The figures highlight the pressure that higher operating costs placed on the industry’s profitability despite healthy volume growth.
Cement Prices Remain Largely Stable
Sehool Bhatt, Director at CRISIL Intelligence, said earnings could increase by approximately 2% year over year, helped by a higher contribution from premium cement products.
However, excluding the impact of GST, cement prices remained largely stable during the quarter. Strong competition within the industry prevented companies from implementing significant price increases.
Maheshwari estimated that realization per tonne improved by around ₹200, or approximately 4% sequentially, helped by price increases introduced to offset higher raw material and fuel costs.
Cement prices increased by around ₹10-15 per bag in April, followed by gradual improvement during May and June. As a result, the effective increase in prices across regions during the first quarter was estimated at approximately ₹7-10 per bag.
Higher Input Costs Offset Pricing Gains
Despite the improvement in realizations, the increase was not sufficient to fully compensate for higher operating costs.
According to Equirus, the average profitability of leading cement companies improved by approximately ₹25 per tonne sequentially. However, higher power and fuel costs, raw material expenses and packaging costs per tonne reduced the benefit from better realizations.
The overall trend remained relatively positive, largely because of the improvement recorded by Ambuja Cement, which had reported exceptionally high costs in the fourth quarter of fiscal 2026.
Profitability Outlook Remains Challenging
Excluding Ambuja Cement, average profit per tonne declined by approximately ₹40 sequentially during the quarter.
On a year-over-year basis, profit per tonne was lower by around ₹65, mainly because of higher operating expenses and relatively flat realizations.
Overall, the first quarter presented a mixed picture for India’s cement industry. Strong volume growth of 7-8% indicates continued demand from construction and infrastructure activity, but rising fuel, raw material and packaging costs remain a key challenge for profitability.
Going forward, cement manufacturers are likely to focus on premium products, cost optimization, operational efficiency and selective price increases to protect margins amid intense competition.
