Cement stocks are likely to remain sensitive to infrastructure spending trends, pricing power, and rising input costs in the near term, as weak demand and margin pressures continue to weigh on the sector, according to a report by Nuvama.
The brokerage said cement demand remained sluggish in May 2026 across most parts of the country, largely due to labour shortages and unfavourable weather conditions.
The western region stood out as the only major market to report an improvement in demand during the month.
In eastern India, West Bengal continued to witness weak demand amid disruptions linked to state elections. Bihar showed a modest recovery, although supply constraints caused by raw material shortages and unseasonal rainfall limited momentum.
Southern India also reported sluggish demand, affected by election-related labour shortages and adverse weather.
Demand in the northern region remained muted due to labour constraints, while the central region saw a slight improvement.
Nuvama noted that anticipated price hikes for May did not materialise in most markets because of weak demand conditions. However, price increases implemented in April have largely held.
Bihar was an exception, where cement prices rose by Rs 5 to Rs 10 per bag during May, supported by improved demand and constrained supply.
Prices across West Bengal, southern India, northern India, and the central region remained broadly stable after April’s hikes. Dealers are now expecting fresh price increases of around Rs 10 per bag in June across northern, central, and western markets.
In the south, however, expected price increases of Rs 10 per bag in the non-trade segment were not implemented in May. The report also flagged rising input costs as a key concern for profitability.
Petcoke prices, while slightly lower than recent peaks, remain elevated at USD 151 per tonne, up USD 25 per tonne quarter-on-quarter. According to the brokerage, the impact of these higher fuel costs is likely to become more visible from late Q1FY27 into Q2FY27.
Packaging costs are also expected to remain a pressure point for margins. Nuvama said broader geopolitical uncertainty could also weigh on sector sentiment by affecting housing demand and investor confidence.
The brokerage added that infrastructure capital expenditure trends, demand recovery, and the sector’s ability to sustain price hikes will be critical factors in determining cement stock performance in the coming quarters.
