Cement manufacturers have raised prices by ₹15–20 per 50 kg bag this month, resulting in an all-India average increase of about 5% in April compared with March, according to a Motilal Oswal report dated 10 April. The surge is being driven by higher expenses for fuel, packaging materials and logistics, with early indicators suggesting that the current pricing cycle may extend further if demand conditions remain stable. Dealers also expect additional hikes in the coming weeks as producers attempt to protect margins.
The cost pressure is largely linked to global developments, particularly the West Asia conflict, which has disrupted energy markets and pushed up crude oil and freight costs. Energy accounts for more than a quarter of total cement production costs, and analysts estimate that power and fuel expenses could rise by 10–12% this year. The disruption has also strained petrochemical supply chains, affecting polypropylene availability used in cement packaging bags, while elevated crude prices have increased costs of key kiln fuels such as petcoke and coal.
India previously saw cement prices peak at around ₹305 per 50 kg bag in FY23 during the global oil shock following the Russia–Ukraine war. Prices later eased to ₹300 in FY24 and ₹281 in FY25 as input costs moderated and competition intensified, before recovering to an average of ₹287 in FY26 due to renewed inflationary pressures. Current projections suggest prices could return to ₹300–305 levels in FY27, approaching a four-year high. The latest round of increases has been led by major producers including UltraTech Cement, as companies increasingly focus on margin protection over aggressive expansion.
Despite higher prices, demand in the sector remains resilient, supported by infrastructure spending and housing activity, with growth expected at 6.5–7.5% this year. However, Crisil estimates that operating margins for cement makers could still decline by 1.5–2% due to overall cost escalation of 4–6% this fiscal year, highlighting the persistent squeeze between rising input costs and competitive pricing dynamics in a highly concentrated industry.
