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Freedom251 › Blog › cement prices

Nomura Sees Cement Prices Rising as Fuel Costs Pressure Margins; UltraTech Remains a Top Pick

By Freedom251 Team · · 3 min read

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Nomura’s October 6, 2026 update, as reported by Moneycontrol, did not specify a ₹12–15-per-bag hike as the amount needed to offset fuel costs. It reported that Indian cement trade prices rose about ₹10 per bag in September and that dealers expected a further increase of around ₹10 in October. Nomura remained constructive on the sector and named UltraTech Cement and Dalmia Bharat as its top picks, both with reported Buy ratings.

What Nomura reported about cement prices

Moneycontrol’s October 6 account of Nomura’s channel checks put the September pan-India average trade-price increase at around ₹10 per bag month on month. Dealers expected another increase of around ₹10 in October. The report described the price push as largely company-led, rather than evidence that all announced increases had already reached customers.

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These are brokerage channel-check estimates reported by a news outlet, not official government price data or a confirmed nationwide retail price. An expected increase is not the same as an implemented increase: dealer acceptance, local demand and the gap between announced and effective prices determine how much reaches the market.

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Why fuel costs are putting pressure on margins

Nomura’s reported checks showed average imported fuel costs up 1% quarter on quarter in 2QFY27 and more than 15% above 4QFY26. Thermal-coal prices rose 2% and retail diesel prices 4% in the latter part of 2QFY27. These movements add pressure to cement producers’ costs, alongside packaging expenses noted in earlier coverage.

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Nomura put the 2QFY27 average adjusted trade price at ₹325 per bag, broadly flat quarter on quarter. The average cement spread was ₹2,449 per tonne, down ₹62 per tonne from the previous quarter. Fuel-cost-lagged spreads were also lower than the 1QFY27 average: by ₹106 per tonne on a 60-day basis and ₹250 per tonne on a 90-day basis, according to the figures reported by Moneycontrol.

The relationship is not a simple one-for-one calculation: a bag-price increase does not automatically offset fuel inflation. The outcome depends on how much of the increase is realized, the timing of fuel-cost changes, and other operating costs. Nomura’s reported view was that “sustained margins will depend more on the industry’s ability to maintain pricing than on further easing in input costs.”

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How the October hike estimates differ

The ₹12–15 figure in the headline framing is not verified as Nomura’s estimate in the reports reviewed. Other October hike ranges were attributed to different brokerages and should not be merged with Nomura’s channel checks.

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Brokerage and report Reported figure What it represents
Nomura, reported by Moneycontrol, October 6, 2026 Around ₹10 per bag in September; dealers expected around ₹10 more in October September trade-price movement and dealer expectations, not a stated ₹12–15 fuel-cost offset target
Elara Capital, reported by ETEnergyWorld, September 30, 2026 ₹5–15 per bag Planned early-October increase; Elara also reported petcoke prices had risen 19% in the prior month
Centrum Broking, reported by The Economic Times/ANI, September 29, 2026 ₹5–20 per bag Possible October increase, with sustainability depending on demand and dealer acceptance

Regional pass-through and demand risks

Nomura’s reported checks showed uneven implementation across India. South had the strongest momentum, with indications of increases of up to ₹20 per bag. Announced ₹10 increases in the North and East had not been effectively implemented, while Central India was broadly flat. The report also noted weak uptake, festivals and monsoon-related disruption as reasons dealers could struggle to absorb further increases or delay them.

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That regional variation matters: a company announcement is not proof of a uniform change in realized trade prices. Investors following the update should distinguish trade from non-trade prices and compare announced hikes with dealer-level prices and demand in each region.

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What the outlook says about the sector and UltraTech

Nomura forecast Indian cement-volume growth of 6–7% in FY27, as reported by Moneycontrol on October 6, 2026. This is a forecast, not a reported result, and the same coverage flags demand as a constraint on pricing power. Nomura named UltraTech Cement and Dalmia Bharat as its top picks, both with reported Buy ratings. The report does not establish that a price hike alone will restore margins or guarantee returns for either company.

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For context, Moneycontrol’s July 8, 2026 coverage of Nomura’s Q1FY27 view said average trade prices were about ₹326 per bag after a roughly 3% sequential increase, while higher fuel and packaging costs outweighed the price benefit. The October update is later and describes a different quarter; the figures should not be treated as directly interchangeable.

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This is market-news context, not individualized investment advice. The cited coverage summarizes brokerage research and channel checks rather than publishing the underlying Nomura note.

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