New Delhi, June 22: Cement demand is likely to remain soft in the first quarter of FY27 amid sluggish housing activity and mixed regional trends, even as falling crude oil prices offer some relief to the sector, according to a report by Nuvama Institutional Equities.

The brokerage noted that while government capital expenditure showed signs of improvement in April 2026, broader investment activity remained uneven. Combined capital expenditure by the Centre, states and central public sector enterprises (CPSEs) declined 10 per cent year-on-year in the fourth quarter of FY26, though it rose 4 per cent in the full fiscal year. Capital expenditure increased 27 per cent year-on-year in April 2026.

The report further noted, ''Real estate volumes have been sluggish with launches (in volume terms) falling 4 per cent YoY in FY26 (down 8 per cent YoY in FY25).''

Regionally, cement demand stayed strong in the west and recovered gradually in the south, but remained weak in the east, central and northern regions amid heatwaves and labour shortages.

While prices declined ~Rs 15-20/bag in West Bengal in June 2026, Maharashtra's witnessed a price surge at Rs 10/bag in, while the prices remained broadly stable in other regions.

The report further noted India's "housing activity continues to moderate," with pan-India launch volumes plunging "7 per cent YoY in Q4FY26 and 4 per cent YoY in FY26 after having declined 8 per cent YoY in FY25."

Overall, "cement demand is mixed in Jun-26 on account of unfavourable weather and labour shortages in select regions," the report added.

As per Nuvama, surging input costs are expected to start impacting the sector from the latter part of the first quarter of FY27. "Going ahead, input cost trends, cement prices and housing and infra demand would drive stock prices. We remain neutral on the cement space," it said.

It further stated "industry volumes should grow in mid-single digit YoY in Q1FY27E on account of global uncertainty and rising input costs." (ANI)