Indian cement companies set for resilient Q2 earnings, 4 pc volume growth: Report
India’s cement industry looks set for a solid showing in the upcoming earnings season, thanks to steady prices and manageable cost pressures—even with softer sales volumes. That’s the upbeat take from a fresh Goldman Sachs report, which points to resilience amid some seasonal challenges.
Back in July and August, cement prices held firm despite lower-than-expected demand in a typically slow quarter. This has kept operations humming smoothly for major Indian cement players. Goldman Sachs has slapped “buy” or “neutral” ratings on key companies, betting on a modest 4% year-on-year volume growth for the second quarter of fiscal year 2026.
The report flags a recent GST cut on cement as a potential game-changer. It could push buyers to hold off until late September, sparking a rush of pent-up demand. Sure, early September saw some sluggishness, but Goldman Sachs expects a pickup in the final week, fueled by that tax relief.
On the cost side, things are mostly stable, though rising petcoke prices and a sliding rupee are adding some headwinds. Still, the overall margin squeeze looks limited.
Capacity expansions are ramping up big time this fiscal year. India’s top three cement giants plan to add about 41 million tonnes of new production muscle. Looking ahead to FY26, the whole industry could tack on 45-50 million tonnes—outpacing the projected 31 million tonnes of demand growth.
Goldman Sachs notes that many of these projects are already underway, so companies might only pause a few if demand softens further.
Prices have dipped just a bit from first-quarter hikes, down an average of Rs 5-10 per bag (or about Rs 120 per tonne) compared to June levels. Separately, credit rating firm ICRA estimates the GST reduction will lift cement companies’ operating profits by Rs 100-150 per metric tonne, giving the sector an extra boost.
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