Nomura believes the cement industry needs price hikes of Rs 12-15 per bag to fully offset incremental fuel cost pressures, with timely absorption of announced increases critical to protecting margins ahead of the seasonal demand slowdown. The brokerage named UltraTech Cement as a top pick in its coverage.
"Encouragingly, the industry has initiated pricing action, with Rs 10/bag hikes announced for Oct'26, marking a positive shift in pricing discipline," Nomura said in a note dated October 8.
Input cost inflation has intensified after 2QFY27, with spot imported petcoke prices rising around 25% quarter-on-quarter in October 2026. Imported petcoke currently stands at $184 per tonne, up 25% quarter-on-quarter.
However, since spot fuel costs generally take 60-90 days to be fully reflected in income statements because of longer transit times and inventories, Nomura expects the recent increase to have a limited impact in 3QFY27F, with most of the cost pressure likely to flow through in 4QFY27F.
"This provides some near-term cushion, but we believe timely absorption of the announced hikes and further pricing action will be critical to protect margins," the brokerage said.