Whalesbook
Cement companies are bracing for a weaker-than-usual earnings report for the quarter ending December 2025. Analysts project profitability will be significantly impacted by a Goods and Services Tax revision that led to moderated prices, alongside persistent weak demand from the non-trade segment and escalating raw material costs.
Regulatory Headwinds: GST and Price Pressure
The October-December period marked the first full quarter following Goods and Services Tax rate reductions. However, cement prices experienced a notable decline, falling approximately 3% nationwide compared to the seasonally slower September quarter. Southern and eastern regions saw the most substantial price erosion. Analysts noted that even after accounting for the GST revision, cement prices remained weaker than expected.
The average price per 50 kg bag of cement across India stood at around ₹333 in the December quarter. This represents a decrease from ₹372 per bag in the preceding three months and ₹359 a year earlier. This price weakness directly impacts revenue streams for major producers.
Weak Demand and Rising Costs
Compounding the pressure from lower prices are increased costs for essential raw materials like pet coke. This dual challenge of reduced selling prices and higher input expenses is expected to significantly dent earnings before interest, tax, depreciation, and amortization (EBITDA) for cement producers.
Profitability Outlook Dims
Industry-wide average EBITDA per tonne is projected to fall within the ₹750-₹1,050 range for the December quarter. This contrasts sharply with the more than ₹1,000 per tonne achieved in the first half of 2025. Analysts suggest Shree Cement Ltd. is likely to demonstrate the strongest performance within the sector despite these headwinds.