Cement prices and volumes are expected to improve in the coming months, driven by better demand and a favourable base, according to a recent report by Nuvama Research. The report stated the outlook for the cement sector is turning positive, with both prices and volumes likely to see an upward trend.
It said, “We believe the outlook is improving for the cement space as both volumes and prices are likely to record an uptick going ahead, aided by a low base of FY25E.” In April 2025, cement prices have risen across all regions, with the southern region leading the surge, followed by the eastern, central, northern and western parts of the country.
This increase has come on the back of improved demand. However, dealers expect that some of the recent price hikes may be partially rolled back towards the end of the month.
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The rise in prices has been supported by a pickup in demand, particularly due to capital expenditure by the central and state governments, as well as Central Public Sector Enterprises (CPSEs). Central government capex, which was down 12% year-on-year in the first eight months of FY25, has shown a recovery and was up 1% in the first eleven months.
Similarly, CPSE capex, which had declined 10% in the first eight months, remained flat for the full year. State government spending has also shown signs of recovery, further supporting cement demand.
The report expects industry volumes to grow by 7-8% in the fourth quarter of FY25. However, for the full year, volume growth is likely to be slower at around 4-5%. This moderation in growth is due to the general elections, a slowdown in construction activity, and a high base from the previous year.
In FY24, the industry had posted a strong volume growth of around 9% year-on-year. The report highlights that a similar trend was observed in FY20, the year after the last general elections, when cement volumes declined by nearly 1% after registering a 13% growth in FY19.
Overall, while the sector may face some short-term challenges, the long-term outlook appears to be improving, with rising prices and stable demand expected to support growth.
