India Cement Prices Rose Broadly in April, Expected to Continue Moderate Growth in May

Overview

This report is based on Nomura's channel checks with Indian cement distributors, analyzing cement price dynamics and regional demand conditions from April to May 2026. The key takeaway is that nationwide cement trade prices broadly increased in April, averaging ~INR 10 per bag, with preliminary announcements suggesting continued moderate growth in May. However, significant divergence exists in demand recovery and price pass-through across regions. The report maintains buy ratings for several industry leaders, citing an overall positive price trend despite near-term demand volatility.

Core views

On price trends, the average nationwide cement trade price rose ~INR 10 per bag in April to ~INR 326 per bag, driven by improved demand in some regions in the latter half of the month. Based on preliminary announcements from producers, May is expected to see a further ~INR 5 per bag increase to ~INR 330 per bag, though distributor feedback indicates sustainability depends on demand recovery and regional dynamics. Regional performance diverges significantly. The eastern region led April gains with a ~INR 16 per bag increase, expecting marginal ~INR 3 growth in May. The northern region rose ~INR 12 in April, with ~INR 5 further expected in May, though labor shortages and weak demand limit full pass-through. The western region faces persistent price pressure—Pune sales were hit by RMC plant regulations, while Nagpur rolled back hikes due to weak demand. The central region expects flat prices in May amid sluggish demand. The southern region rose ~INR 8 in April, with ~INR 9 further expected in May, though Kerala and Tamil Nadu saw price reversals due to election-driven demand weakness.

Analysis framework

The report employs channel checks, gathering frontline price and demand data through direct distributor interviews, providing more timely insights than financial statements. Analytically, the market is segmented into eastern, northern, western, central, and southern regions, tracking monthly trade price changes, implementation rates, and demand drivers (elections, regulations, labor, etc.). Valuation models (EV/EBITDA) are then used to derive target prices and ratings, combining high-frequency data with long-term valuation.

Methodology notes

• Industry Analysis FrameworkVolume-Price Split

  Volume-Price Split Analysis

  Decomposing industry revenue growth into price (INR/bag) and volume drivers. The report focuses on monthly price changes to assess marginal profitability improvements.

• Valuation MethodEV/EBITDA valuation

  Enterprise Value Multiple

  Using EV/EBITDA multiples for valuation. The report assigns Ramco a target price based on 13x FY26F EV/EBITDA, suitable for capital-intensive cement sectors.

• Industry Analysis Framework

  Channel Checks

  Obtaining high-frequency data through direct interviews with supply chain participants (e.g., distributors). The report verifies official price hike implementation (absorption) via distributor feedback, addressing financial data lag.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Ultratech (UTCEM IN)

  Benefit

  Strengths

  Industry leader, broad regional coverage

• Dalmia (DALBHARA IN)

  Benefit

• Ambuja (ACEM IN)

  Benefit

• Shree Cement (SRCM IN)

  Benefit

• Ramco (TRCL IN)

  Benefit

  Strengths

  Southern region advantage

  Weaknesses

  Southern volume growth may lag expectations

  Comparison

  Target price INR 1,060

  Risks

  Project delays may shrink market share

• Nuvoco (NUVOCO IN)

  Benefit

Key data

• April Nationwide Trade Price Increase~INR 10/bagAverage trade price reached ~INR 326/bag
• Expected May Increase~INR 5/bagExpected average trade price ~INR 330/bag
• April Eastern Region IncreaseINR 16/bagTop-performing region in April
• Expected May Southern Region IncreaseINR 9/bagExpected trade price ~INR 343/bag
• Ramco Target PriceINR 1,060Based on 13x FY26F EV/EBITDA

Impact & implications

For the industry, April's broad price hikes indicate restored pricing power, but May's regional divergence suggests demand recovery is incomplete. For investors, near-term price increases support earnings expectations, especially for firms with higher exposure to eastern/southern regions. The report highlights monitoring actual price absorption—if demand falters, hikes may face reversals.

Risks

• Actual cement prices below expectations
• Southern region volume growth below expectations
• Project delays shrinking southern market share
• Western region regulatory impacts on sales/dispatch
• Election-driven demand weakness in some regions

What to watch

• Demand recovery sustainability
• Regional dynamics
• Pune RMC plant regulatory relief
• May price hike absorption rates