Cement companies are set to witness weaker-than-usual earnings for the December quarter weighed down by a GST-led moderation in prices, weak demand from the non-trade segment and higher cost of raw materials.
As compared to the seasonally weak September quarter, cement prices are down around 3 per cent pan-India in the Oct-Dec period, with southern and eastern India seeing the sharpest corrections. While the December quarter is the first full quarter after a reduction in GST rates for cement, prices have been weaker even adjusted for the GST rate cut, analysts said.
The average price of cement pan-India per bag of 50 kg was around ₹333 in the December quarter, down from ₹372 per bag in the September quarter, and ₹359 in the comparable quarter last year.
This weakness in prices, along with higher prices of pet coke will impact the earnings before interest, tax, depreciation and amortization of cement producers. The industry’s average EBITDA per tonne, which had been above ₹1,000 for the first half of 2025, is seen in the range of ₹750 -1,050 in the December quarter, with Shree Cement likely to top charts.
The profitability is lower for the second quarter in a row, and is likely to be at the lowest level in four quarters, analysts said. Despite robust volume growth generating operating leverage for companies during the quarter, this impact is expected to be eclipsed by a continued weakness in pricing.
“Weak non-trade prices during Q3 will erase the operating leverage gains and consequently result in unit EBITDA falling,” analysts at Emkay Global said.
The net profit, though, will be as significantly higher as compared to the previous year, largely led by a growth in volumes.>
