Cement - India: The missing power of pricing – Not entirely a demand issue

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Cement - India: The missing power of pricing – Not entirely a demand issue

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Cement - India

The missing power of pricing – Not entirely

a demand issue

Industry Overview

West Asia impact cooling, but is it relevant now? 06 July 2026

Cement stocks have corrected since the start of West Asia conflict with concern on cost Equity

headwinds as well as lack of pricing strength in 1Q. While the near-term earnings India

headwind due to elevated costs is well known now, some of the costs have started to Cement

ease in recent weeks that should be reflected from 3QFY27. Therefore, the focus is back Neha Manpuria >>

on demand recovery (after a tepid 1Q despite low base) as well as the ability to push Research Analyst

through higher prices particularly post monsoon. Assuming there is no conflict BofAS+91 22India6632 8307

escalation, we think these factors will be key for the 2HFY27 earnings recovery. While neha.manpuria@bofa.com

SRCM has outperformed peers in this period of uncertainty, we prefer UTCEM with its Charul Agrawal >>

Research Analyst

volume growth and ability to manage cost positioning it well for any 2H recovery. ACEM BofAS India

and Dalmia have underperformed peers with valuations being supportive. +91 22 6632 8255

charul.agrawal2@bofa.com

Hoping for demand to improve post monsoon

Industry demand in 1QFY27 grew 5-6% YoY despite low base last year (geopolitical

disturbances, early monsoon). While Central government capex trends remain healthy

(+13% YoY growth in Apr-May), companies indicated election in key East/South states Exhibit 1: Despite cost headwinds and

(WB, Tamil Nadu) as well as heat wave impacting demand from May. BofA India lack of pricing growth, most cement