Indian cement companies set for resilient Q2 earnings, 4 pc volume growth: Report

New Delhi, Sep 24 India's cement sector could prove resilient in the upcoming earnings season, owing to price sustainability and limited margin pressure despite weak volumes, a new report has said.

Price sustainability in July or August, despite weaker-than-expected volumes in a seasonally weak quarter, has driven stable operational numbers for Indian cement companies, US broking house Goldman Sachs said in the report.

The broking house has issued 'buy' or 'neutral' ratings on major cement companies in India. Goldman Sachs anticipates a modest industry volume growth of approximately 4 per cent year-on-year in Q2FY26. The firm said the GST cut could shift demand towards the end of September.

It highlighted early-September weakness but predicted an increase in activity during the last week of the month, driven by a GST-related surge in pent-up demand.

The firm noted that costs remain generally stable but added that petcoke prices have spiked recently, and a weakening rupee has created additional pressure.

Capacity additions are significant this fiscal year, with India's three largest cement companies set to add approximately 41 million tonnes.

The brokerage forecasted the industry to add nearly 45-50 million tonnes of capacity in FY26, higher than the 31 million tonnes expected incremental demand in FY26.

The broking house reported that numerous projects are currently under construction, with construction work on a majority of the 45-50 million tonnes pipeline having started, and companies may only selectively defer expansions in response to softening demand.

Goldman Sachs noted that price increases taken in Q1 have corrected only marginally in Q2, averaging Rs 5–10 per bag, or approximately Rs 120 per tonne, compared to June 2025 levels.

Credit rating agency ICRA had earlier said that the reduction in Goods and Services Tax (GST) will boost the operating profit of cement companies by Rs 100-150 per metric tonne (MT).

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