Realisation Per Tonne: The Number That Drives Cement and Steel Results

Open any cement company’s quarterly presentation and, somewhere after the volume slide, you’ll find one line that tells you more than the headline profit: realisation per tonne. It is the average money the company actually kept for every tonne it sold, after taxes and discounts. Steel companies report the same idea, and analysts lean on it heavily for both sectors because these are commodity businesses where the product barely changes but the price does.

We think it’s the single most useful number for reading a cement or steel quarter. Revenue can rise just because the company sold more. Profit can jump because fuel got cheaper. Realisation strips those effects apart and asks a narrow question: did each tonne fetch more money or less?

What Realisation Per Tonne Actually Means

At its simplest, realisation per tonne is net sales from a product divided by the tonnes of that product sold. The word “net” carries a lot of weight. UltraTech Cement, in its Q2 FY27 investor presentation, spells out its own definition in a footnote: realisation is the selling price net of GST, less discounts.

That definition matters because the price you see on a dealer’s board is not what the company earns. GST goes to the government. Trade discounts, dealer incentives and schemes come off the top. What is left is the realisation, and that is the figure that flows into revenue.

So the basic formula looks like this:

• Realisation per tonne = Net sales of the product ÷ Volume sold (in tonnes)
• Net sales = Gross invoice value − GST − discounts and dealer schemes

Simple enough. The trouble starts when people try to calculate it themselves from the profit and loss statement, which we’ll get to.

A Worked Example With Simple Numbers

Let’s take an imaginary cement maker, call it Deccan Cement, and use round numbers purely for illustration. None of these are real company figures.

• Cement sold in the quarter: 5 million tonnes
• Net cement sales: ₹2,500 crore

₹2,500 crore is ₹25,000 million. Divide by 5 million tonnes and you get ₹5,000 per tonne. That is Deccan’s realisation.

Now suppose that in the next quarter it sells 5.5 million tonnes and net cement sales come in at ₹2,640 crore. Revenue is up 5.6%, which looks fine. But ₹26,400 million divided by 5.5 million tonnes is ₹4,800 per tonne. The company sold 10% more cement and earned 4% less on each tonne. Volume carried the revenue line, and price quietly went the other way.

That is exactly the kind of thing the headline revenue number hides. If you assume a 50 kg bag for the sake of the arithmetic, a tonne is 20 bags, so a ₹200 drop per tonne works out to ₹10 a bag. Small at the counter. Big across millions of tonnes.

Revenue tells you how much a cement company sold. Realisation tells you what each tonne was actually worth, and the two often move in opposite directions.

What a Real Presentation Shows

UltraTech’s Q2 FY27 deck is a clean example because it reports the number directly. Its domestic grey cement realisation was ₹5,176 per tonne in Q2 FY27, against ₹5,076 in Q2 FY26 and ₹5,218 in Q1 FY27. The company calls that a 2% increase year on year. The prior-year figure is restated to include India Cements (ICL), which UltraTech now includes in its domestic numbers, so the comparison is like for like.

Look at what those three numbers say together. Year on year, each tonne fetched about ₹100 more. Quarter on quarter, it fetched about ₹42 less. The July to September quarter covers the monsoon. UltraTech’s deck itself notes heavy rainfall slowing demand in parts of the country, and ACC’s release cites monsoon impact and seasonal shutdowns, so a dip from the June quarter is not a shock. Reading only the year-on-year line would make the quarter look better than the sequential trend suggests. Reading only the sequential line would make it look worse than the annual picture.

The same presentation shows UltraTech’s sales volume rising from 33.9 million tonnes to 38.2 million tonnes, and operating EBITDA per tonne at ₹974, up ₹60 from a year earlier. So in this quarter, most of the growth came from selling more tonnes, with a modest lift in price per tonne on top. If you want the full quarter in context, our UltraTech Cement Q2 results coverage walks through profit and revenue.

Realisation Is Only Half the Story: Cost Per Tonne

A higher realisation means nothing if costs climbed faster. That is why the companies that report realisation usually report cost per tonne too, broken into its main buckets.

UltraTech’s grey cement cost slide for Q2 FY27 shows, per tonne:

• Logistics: ₹1,136, about 27% of total costs, up 0.1% year on year
• Fuel: ₹1,030, about 24% of total costs, up 14% year on year
• Raw material: ₹718, about 16% of total costs, up 6% year on year
• Power: ₹337, about 9% of total costs, up 12% year on year

Put that next to the realisation line and the quarter makes more sense. Price per tonne rose about 2%. Fuel per tonne rose 14%. EBITDA per tonne still improved by ₹60, so the business absorbed the fuel hit through scale and other costs. But you can see how thin the cushion is. One more quarter of fuel inflation without a price increase and that per-tonne margin comes under pressure.

This is the basic spread every cement and steel analyst tracks: realisation per tonne minus cost per tonne gives you profit per tonne. Our explainer on EBIT margin in results covers the margin side in more detail.

Why You Shouldn’t Just Divide Revenue by Volume

Here’s the trap. Most investors grab “revenue from operations” from the results table, divide it by tonnes sold, and call it realisation. That number is usually wrong, sometimes badly.

ACC’s Q2 FY27 media release shows why. ACC reported consolidated revenue from operations of ₹5,689 crore on cement sales volume of 9.72 million tonnes. Divide one by the other and you get roughly ₹5,850 per tonne. But ACC’s revenue also includes its ready-mix concrete business, which sold 1.07 million cubic metres in the quarter, plus other operating income. Concrete is sold by the cubic metre, not the tonne, so lumping that revenue into a per-tonne cement figure inflates it.

The same release has another wrinkle. ACC’s operating EBITDA was ₹401 crore, a 7.0% margin, which works out to ₹414 per tonne against ₹849 per tonne in Q2 FY26. The company itself points to higher volumes under its master supply agreement (MSA) with parent Ambuja Cements as a factor. Volumes sold under an intra-group supply arrangement can carry very different economics from trade sales to dealers, so the mix of who the tonnes went to can move the per-tonne numbers sharply.

The lesson: use the realisation figure the company reports, and read the footnote that says how it was calculated. If you must calculate it yourself, use segment revenue for the product, not total revenue, and check whether traded goods or intra-group sales are inside it.

The realisation a company reports, with its footnote, is worth more than any number you back out of the total revenue line.

What Moves Realisation Per Tonne

In cement and steel, a handful of things push this number around quarter after quarter.

Regional prices and seasonality

Cement is heavy and costly to move. Logistics is the single biggest cost bucket in UltraTech’s own breakdown, at 27% of total costs, and the company’s deck also cuts its demand commentary region by region because conditions differ so much. Weather adds a seasonal swing on top, which is what UltraTech’s dip from the June quarter to the September quarter reflects.

Product mix

Premium cement brands usually sell at a higher price than ordinary grades. ACC, for instance, says premium products made up 47% of its trade sales in Q2 FY27. A shift toward premium products can lift realisation even when the base price is flat. In steel, the equivalent is the split between flat products, long products and value-added grades.

Trade versus non-trade sales

Trade sales go through dealers to individual home builders. Non-trade sales go to large buyers such as infrastructure contractors, who typically negotiate sharper prices. ACC reports its trade share rose 7 percentage points year on year to 78%. Higher trade share generally supports realisation.

Discounts and schemes

Because realisation is net of discounts, a company that pushes volume with heavier dealer schemes will see realisation slip even if the list price never changes. This is often the first place a price war shows up.

Freight and lead distance

Some companies report realisation net of freight, others report freight separately as a logistics cost. That choice changes the number. UltraTech reports logistics as a separate cost line, and says lead distance came down by 8 km year on year. Always check which convention the company uses before comparing two companies.

Using Realisation Per Tonne in Steel Results

The logic in steel is the same: net sales of steel divided by tonnes of steel sold. The differences are mostly about inputs and markets. For an integrated steelmaker the big raw materials are iron ore and coking coal rather than limestone and kiln fuel, and because steel is traded across borders far more than cement, import and export prices feed into domestic realisation.

When you read a steel company’s quarter, put three things side by side: sales volume, realisation per tonne, and EBITDA per tonne. If volume rose, realisation fell and EBITDA per tonne held up, costs must have come down. If realisation rose but EBITDA per tonne didn’t, input costs ate the price gain. Our SAIL Q2 results write-up is a useful reference for how a steel quarter is laid out.

A Quick Checklist for Your Next Results Season

• Find the realisation figure the company reports and read how it is defined.
• Compare it both year on year and quarter on quarter, and allow for seasonality.
• Line it up against cost per tonne, especially fuel and power, which move fast.
• Check EBITDA per tonne to see whether the spread widened or narrowed.
• Look for mix changes: premium share, trade share, intra-group volumes.
• Don’t compare two companies’ realisations without checking whether freight is netted off.

For a broader framework that ties these per-tonne numbers back to the full results statement, our guide on how to analyse quarterly results of a company is the place to start.

Realisation per tonne won’t tell you whether a cement or steel stock is cheap. What it will tell you is whether the business is earning more for what it makes, or simply making more of it. Those are very different stories, and the market usually prices them differently.

Disclaimer: This article is for educational purposes only and is not investment advice. Company figures cited are from the companies’ own Q2 FY27 disclosures linked above. Please do your own research or consult a SEBI-registered investment adviser before making investment decisions.