Cement Sector Poised for a Strong FY26: Profitability in Focus

With input costs stabilizing and demand momentum holding steady, the Indian cement industry is setting the stage for a strong FY26. According to Sunny Agrawal (Kotak Securities), the sector is expected to witness significant margin expansion and improved earnings visibility. What’s Driving the Optimism? * Softening Costs: Prices of pet coke, coal, and freight have eased considerably, improving operational efficiency across the board. * Volume Growth: Steady infrastructure push, housing demand under PMAY (Urban + Rural), and pre-election government spending are fueling cement consumption. * Pricing Discipline: After years of volatility, price hikes—especially in southern and eastern regions—are sticking, helping protect margins. Top Beneficiaries:

, , , and JK Cement are well-positioned due to strong balance sheets and regional diversification. Mid-cap names like Ramco Cements and India Cements could see disproportionate gains if pricing remains firm and cost control sustains. What to Watch: While the structural demand story remains intact, any disruption in fuel prices or sluggish rural construction could cap short-term gains. Also, ongoing capacity additions may put pressure on utilization rates. Investor Takeaway: FY26 could mark a breakout year for cement players with robust cost levers, prudent capacity expansion, and strong retail presence. Long-term investors may consider selective exposure as earnings begin to reflect operating leverage. Source: The Economic Times No Recommendations