Indian cement companies are expected to post lower net profits in the April-June quarter due to sluggish demand and higher cost of raw materials such as gypsum, coal and fly-ash.

Cement consumption has remained flat during the past quarter as a drop in urban housing demand has hurt construction activity and also due to a slowdown in the government’s infrastructure spending, brokerage company IIFL said in a research note.

However, the companies are likely to post higher sales as cement prices had increased by up to 5% during the first quarter of the financial year that began April 1, analysts said.