Cement companies could hike prices again in June as input costs escalate, Nomura says

Cement companies may have to hike prices yet again in June to offset the rising input costs and to protect industry spreads, brokerage firm Nomura said in a note on Tuesday, June 2.

According to the brokerage's latest channel checks, margin comfort is beginning to fade as cost pressures increase, prompting the need for additional price increases across several regions. Dealer feedback indicates an average cement price increase of around ₹5 per bag for June.

Nomura said spread trends remain challenging for the sector, although some companies may benefit from lower-cost fuel inventories in the June quarter, leading to differences in profitability across players.

Also read: UltraTech Cement

Regionally, the brokerage noted that demand in the southern and eastern markets continues to remain subdued. In the western region, cement manufacturers have already announced a price hike of around ₹15 per bag for June.

The central region is expected to remain stable, supported by steady demand conditions, while dealers in northern India are reporting a proposed price increase of roughly ₹10 per bag.

Based on its assessment of pricing trends, demand conditions and earnings outlook, Nomura's preferred picks in the sector are

Dalmia Bharat, ACC, Ambuja Cements

, Shree Cement, Ramco Cements, Nuvoco Vistas and Nuvoco Vistas.

Among large-cap cement companies, Bloomberg analyst recommendation data shows strong buy-side support for UltraTech Cement and Ambuja Cement, while Shree Cement has a relatively more balanced mix of buy, hold and sell recommendations.