South India’s cement sector is undergoing a strategic transformation, pivoting from aggressive volume competition to a disciplined focus on value and profitability. As of late February 2026, the region is leading a nationwide pricing revival, with manufacturers implementing a series of hikes to recover margins. Recent market data shows that out of the ₹15–20 price increases announced in early February, approximately ₹10 per bag has successfully sustained. In major hubs like Chennai and Bangalore, retail prices for PPC grades are currently hovering between ₹310 and ₹370 per bag, while premium OPC 53 grades are commanding prices upwards of ₹390 to ₹400. Analysts expect further aggressive movement in the coming months, with potential hikes of ₹40–50 per bag projected for the April–May period. This pricing power is supported by a robust demand outlook for the 2026–2027 fiscal year. Industry experts forecast a 7–8% volume growth, primarily fueled by a significant rural revival. This growth is expected to offset potential delays in central and state capital expenditure. Rural housing now accounts for nearly 32–34% of total cement consumption, benefiting from increased farm incomes and government allocations. On the national level, the Union Budget 2026–27 has provided a strong tailwind with a 9% increase in capital expenditure, reaching ₹12.2 trillion. Effective capex, including grants-in-aid, has surged by 11% to ₹17.1 trillion. This infrastructure push, combined with a 3% increase in the road transport budget to ₹2.87 lakh crore, ensures a steady pipeline of projects for the sector. Profitability metrics are also on an upward trajectory. Ratings agencies project industry operating profits to rise by 12–18%, reaching ₹900–950 per metric tonne in the current cycle. This recovery follows a challenging period where profits had dipped to around ₹806 per metric tonne due to intense competition and high input costs. Operational efficiency remains a top priority for major players. Companies are increasingly shifting toward green energy, with leaders targeting 85% renewable energy usage by 2030. While South India still faces a capacity utilization challenge—lingering around 60–65%—the entry of large-scale players and ongoing consolidation are expected to bring much-needed market discipline. The sector is entering a phase of the "operational grind," where cost reduction and asset optimization take precedence over headline-grabbing acquisitions. With input costs like coal showing a 12% year-on-year decline and freight expenses stabilizing, the environment is ripe for sustained margin expansion throughout the second half of the fiscal year.