Long-term demand outlook for India's cement sector remains robust: Report

New Delhi, Sep 3 (IANS) The long-term demand outlook for India's cement sector remains robust, driven by housing, infrastructure, and urban development projects, a report said on Wednesday.

At the pan-India level, the cement prices rose 7 per cent year-on-year, increasing from Rs 330 per bag in August 2024 to Rs 354 per bag in August this year, PL Capital said in a report.

The peak during the period between July 2023 and August 2025 was seen in November 2023, when prices reached Rs 387 per bag.

As per the report, India’s cement sector saw a price drop in August, with the all-India average falling by Rs 6 per bag month-on-month to Rs 354.

Eastern markets led the fall with Patna witnessing the sharpest correction in the last month, largely due to subdued demand as heavy rains, seasonal weakness, and festivals slowed down construction activity.

Demand is expected to improve once the monsoon recedes, and pricing is expected to improve only post the upcoming festive season.

"For cement companies, the next two months will be critical in balancing cost pressures with demand revival," the report said.

Rural consumption, a key post-monsoon growth driver, is likely to strengthen, supported by higher infrastructure spending.

“After remaining largely steady for the past three months despite the monsoon, cement prices witnessed a sharp correction in August, most notably in the Eastern region," said Tushar Chaudhari, Research Analyst, PL Capital.

While companies are attempting price hikes ahead of the anticipated GST rationalisation, weak festive season demand is likely to offset these efforts, he added.

Although demand is anticipated to recover post-monsoon, the commissioning of new capacities could challenge the sustainability of current price levels, he said.

Industry players are attempting to push through price hikes ahead of a potential GST rate rationalisation, expected to create headroom for pricing stability, according to the report.

However, muted demand and capacity additions across the industry present a challenging backdrop.

Dealers highlighted that repeated hike announcements without implementation are causing inventory pile-ups and adding pressure on working capital.

--IANS

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