Nomura Sees Cement Margins Under Pressure in Q1 FY27, Backs UltraTech and Ambuja as Top Picks

Cement margins are expected to stay under pressure in the June quarter, brokerage Nomura has said, even as it continues to back UltraTech Cement and Ambuja Cement among its top sector picks. The brokerage flagged monsoon related demand softness and elevated input costs as the key drags on cement margins across the industry in Q1 FY27.

Ambuja Cement is expected to be the lone exception to the broader cement margins weakness, with Nomura forecasting a sequential improvement in EBITDA per tonne for the company even as most peers see compression.

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Why Cement Margins Are Under Pressure This Quarter

The June quarter is seasonally the weakest for cement demand in India, as monsoon rains disrupt construction activity across large parts of the country. Combined with elevated fuel, power and logistics costs, this seasonal softness typically compresses cement margins industry wide during Q1, a pattern Nomura expects to repeat in FY27.

Despite the near term margin pressure, Nomura has retained its constructive stance on UltraTech Cement, citing the company’s scale, cost efficiency initiatives and pricing discipline as reasons it should outperform more margin challenged peers through the cycle.

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Why Ambuja Cement Is the Exception on Margins

Nomura’s forecast of a sequential improvement in EBITDA per tonne for Ambuja Cement, even as broader cement margins stay under pressure, reflects company specific factors such as cost synergies from its integration under the Adani Group umbrella, along with plant level efficiency gains. This divergence makes Ambuja a relative outperformer within the sector for the quarter.

What Should Investors Watch on Cement Margins

Investors tracking cement margins should watch Q1 FY27 results for commentary on price hikes, fuel cost trends and volume growth, along with management guidance for the seasonally stronger second half of the fiscal year. A recovery in cement margins typically follows the monsoon as construction activity picks up from September onward.

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Conclusion

Nomura expects cement margins to stay under pressure in Q1 FY27 due to monsoon linked demand softness and cost inflation, while continuing to back UltraTech and Ambuja Cement. Ambuja is seen as the lone exception with a sequential EBITDA per tonne improvement. Investors should track Q1 results and consult a SEBI registered advisor before investing in cement stocks.

Frequently Asked Questions FAQs

Why are cement margins under pressure in Q1 FY27?

Ans. Cement margins are under pressure in Q1 FY27 due to seasonal monsoon related demand softness and elevated fuel, power and logistics costs, according to brokerage Nomura.

Which cement stocks does Nomura back despite the margin pressure?

Ans. Nomura continues to back UltraTech Cement and Ambuja Cement as its top sector picks, even as it expects broader cement margins to remain under pressure in the June quarter.

Why is Ambuja Cement expected to be an exception on margins?

Ans. Nomura forecasts a sequential improvement in EBITDA per tonne for Ambuja Cement, unlike most peers, reflecting company specific cost synergies and efficiency gains within the Adani Group cement portfolio.

What is the UltraTech Cement share price today?

Ans. UltraTech Cement share price was trading around Rs 11,567 on 8 July 2026, down about 0.7 percent, as broader cement stocks traded mixed amid the Q1 margin outlook.

When do cement margins typically recover in India?

Ans. Cement margins in India typically recover from September onward, as monsoon related construction disruptions ease and demand picks up in the seasonally stronger second half of the fiscal year.

Should investors buy cement stocks despite the margin pressure?

Ans. Near term cement margins pressure is a seasonal factor rather than a structural one. Investors should review Q1 FY27 results and management commentary, and consult a SEBI registered investment advisor before investing.