Indian cement industry poised for healthy Q1FY27 demand driven by strong government infrastructure spending. Government capital expenditure surged 26 percent year-on-year in February 2026, reaching Rs 2.3 trillion. However, rising input costs present a significant headwind. Petcoke prices have climbed to USD 153 per tonne, up USD 41 since Q3FY26, pressuring profit margins despite cement price increases announced in early April. The residential real estate sector remains weak, with pan-India launch volumes plunging 28 percent in January-February 2026. Nuvama maintains a neutral stance on the cement space, citing margin pressure despite healthy volume demand and price hikes. Industry volumes grew 9.3 percent year-on-year in February 2026, yet profitability faces headwinds from elevated power, fuel, and packaging costs.
