Cement demand softens in June; Nuvama bets on FY26 recovery, shares top pick

Cement demand across regions, except central, faced subdued conditions in June 2025, Nuvama Institutional Equities noted. The early onset of monsoons has been a significant factor in moderating prices, which are expected to remain soft as the industry steps into a typically weak quarter.

“Cement demand was subdued with prices moderating across regions (except central) in Jun-25 due to the early onset of monsoons,” said Nuvama Institutional Equities. “Demand and pricing are likely to remain soft in the near term as the industry enters the seasonally weak quarter.”

To counteract these challenges, industry players have implemented various cost-saving measures. These efforts, combined with a decline in prices of pet coke and non-coking coal, are expected to aid profitability. Nuvama mentioned that “softening pet coke and non-coking coal prices are likely to aid profitability to some extent.”

Looking ahead, Nuvama remains optimistic about the cement sector’s future, predicting that volumes and prices will improve year-on-year (YoY) in FY26, bolstered by the low base from FY25. They have particularly identified JK Cement Ltd as a promising investment, stating, “We believe the outlook is healthy for the cement space as volumes/prices are likely to be better YoY in FY26E (aided by a low base of FY25). JK Cement (BUY) remains our top pick.”

The softening of international pet coke and non-coking coal prices by around 6 per cent and 5 per cent, respectively, since Q4 FY25 offers a cushion against rising costs. This decline has been particularly notable since prices ascended in April and May 2025 before falling in June.

“Various cost-efficiency measures undertaken by players along with softening fuel prices should help in keeping costs under check. We remain optimistic on the space,” the domestic brokerage further stated.

On Friday, JK Cement shares slipped 1.84 per cent to trade at Rs 6,225.50. At this price, the stock has gained 35.88 per cent on a year-to-date (YTD) basis.