Chart beat: East India sees highest cement price increase in October
Cement makers are raising prices to protect margins from persistent input cost inflation. In October, average cement prices across India rose by ₹14 per bag month-on-month and by ₹21 per bag over the September quarter (Q2FY27) average exit level, according to dealer channel checks by Nirmal Bang Institutional Equities. One cement bag weighs 50 kg.
Regional divergence
The East stood out, recording the sharpest increase. Prices in the region rose by ₹47 per bag over the Q2FY27 average exit level and by ₹89 per bag month-on-month. Among key cities, trade-segment prices in Kolkata, Bhubaneswar and Patna increased by ₹20-70 per bag. In the trade segment, cement is sold through a network of local dealers, hardware stores and retailers.
More price hikes are expected in November, but sustaining them will be crucial as demand remains subdued, weighing on volumes. Month-on-month average cement sales volumes in the East were flat to slightly negative, declining by 2% in October, the Nirmal Bang report said.
Water shortages, labour availability constraints during the festive season and pollution-related construction restrictions could prevent the full absorption of price hikes. Demand momentum in the region is expected to pick up after Diwali and Chhath Puja in mid-November.
Cost pressures
Birla Corporation, Dalmia Bharat, Shree Cement, Nuvoco Vistas Corp and UltraTech Cement have exposure to the region. The latest management commentaries indicate that demand is expected to improve in the seasonally strong second half of FY27. However, the cost headwind has not eased, keeping variable costs volatile.
Unless the West Asia war resolves, input cost pressures could intensify in H2FY27 as fuel becomes more expensive. International and domestic petroleum coke costs rose 15% and 12% month-on-month, respectively, in October, surpassing their previous peak levels recorded in April and September this year.
If recent price hikes sustain then realizations could improve, but profitability trends remain key for earnings trajectory in the backdrop of unimpressive returns of cement stocks and moderating valuations.