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Cement prices in India are expected to rise sharply in the early part of calendar year 2026, according to a report by HSBC Global Investment Research, driven by strong seasonal demand and the delayed impact of significant capacity additions. Despite large increases in production capacity across the industry, these additions are unlikely to alleviate pricing pressure immediately, allowing producers to push through notable price hikes in the first half of the year. Cement makers have already started taking pricing action in key markets, particularly in the eastern and southern regions. Although demand growth is forecast to moderate compared with the post-pandemic surge, demand is still expected to outpace the near-term supply impact. However, operating performance may remain uneven, with cost pressures such as rising fuel expenses affecting margins before pricing recovery takes effect.
India's cement industry is likely to experience a round of significant price increases in the early part of calendar year 2026, driven by robust seasonal demand and the lagged effect of substantial capacity expansions, according to a recent industry report by HSBC Global Investment Research. Advertisement
The report notes that while the sector has seen large capacity additions planned over the current and next financial years exceeding incremental demand growth these additions will not immediately dampen pricing power. As a result, cement producers are expected to push through notable price hikes during the first quarter of calendar 2026, supported by the traditionally strong demand period.
Industry data suggests that the latter half of 2025 was characterised by limited pricing power and muted realisations, in part due to weather-related disruptions and slower government infrastructure spending. These factors kept prices subdued despite healthy underlying demand in some segments. However, the anticipated timing mismatch between new capacity becoming operational and demand growth is expected to create scope for higher prices in the first half of the year.
Cement companies have reportedly begun pricing actions in key markets such as the eastern and southern regions, with some hikes already implemented and others expected to be announced through January and beyond. Although not all announced increases may be fully sustained, partial pass-through is likely, which could support higher earnings before interest, tax, depreciation and amortisation from the fourth quarter of FY26 onward.
Despite the positive price momentum, the report cautions that operational performance may face pressure in the near term, particularly in regions where prices have seen sequential declines and input costs, such as fuel, remain elevated. Over the medium term, however, improved demand visibility and disciplined pricing behaviour during peak periods are expected to support the sector's outlook.
Source: HSBC Global Investment Research Press Release
5th Jun, 2025
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