Cement demand holds up, but can it offset rising cost pressures?

price hikes better not be delayed beyond April.“Cement spreads, a key leading indicator of industry unitary Ebitda, averaged ₹2,704/tonne in Q4FY26 (forecast), marking a decline of over ₹50/tonne QoQ, as elevated costs pressured margins amid the geopolitical uncertainties,” said a 13 March report by Nomura Research.Given that it takes 60-90 days for costs to flow through to profit and loss statements, thanks to the buffer provided by inventories and transit times, the real pressure may only show up in the coming quarters. Nomura’s channel checks, however, suggest price hikes could resume after March, once the year-end volume push subsides, helping cushion margins.Still, near-term cost pressures are a reality, and will be hard to ignore.

Imported fuel costs are up ₹72/tonne sequentially so far in Q4FY26, imported pet coke has risen another $4/tonne, and packaging costs have jumped 20-25%, adding ₹40/tonne to the cost of cement production. That’s not trivial.

In fact, Nomura estimates the industry may need price hikes of roughly ₹10 per bag in the near term to offset elevated fuel costs.For now, supply bottlenecks are not likely to be an immediate concern for pet coke because of procurement agreements, and shifted dependence towards the US in recent years away from West Asia.Overall, fuel cost inflation is not new for cement companies. But there is a new wrinkle this time: potential shortages of polypropylene (PP), a key input for cement bags.

Refineries are diverting feedstock towards LPG which has infamously been in short supply, tightening PP supply and affecting cement bag availability. With low-cost inventories running up to mid-April, supply chokes will start affecting operations only if the war extends longer.On the