* ACC, Ambuja Q3 profits rise on higher prices
* Revival in demand expected in coming months
* But margins under pressure from rising costs
By Aditi Shah
MUMBAI, Oct 18 (Reuters) - Indian cement makers ACC and Ambuja Cements said an expected pick up in demand in the coming months could be offset by rising road transport and fuel costs, as they reported higher quarterly profit on the back of increased prices.
Demand for cement in India, the world's second-largest producer after China, is expected to rise about 8 percent during fiscal year 2013, say analysts, after a recent government decision to fast track infrastructure projects to revive growth in Asia's third-largest economy.
ACC and Ambuja - both controlled by Swiss group Holcim , the world's second-largest cement producer - along with rivals Jaiprakash Associates and Ultratech Cement - account for about 50 percent of India's cement market.
"Post monsoon we expect that demand for cement will revive and help boost despatches in the months ahead. We are also encouraged by some recent positive indications in the national economy," ACC said on Thursday.
Sales growth across the sector has been slow this year as a result of sluggish homebuilding and construction.
While average cement prices across India have increased by more than 20 percent over the last 12 months, contributing to higher profits, a hike of 14 percent in diesel prices since September will squeeze margins in coming quarters, say analysts.
"The company is keeping rigorous control to mitigate the effect of these inflationary pressures," ACC said.
ACC and Ambuja were among a group of cement makers fined a total of $1.1 billion in June for price-fixing by India's anti-trust body.
ACC, India's No. 2 cement maker, reported a 57 percent rise in net profit to 2.49 billion rupees ($47 million) for the July-September quarter, falling short of market estimates of 2.87 billion rupees, according to Thomson Reuters I/B/E/S.
Net profit at Ambuja, the country's third-largest cement producer, were 78 percent higher from a year ago at 3.04 billion rupees. Analysts expected income of 3.34 billion rupees, according to Thomson Reuters data.
$1 = 52.8850 Indian rupees Editing by Mark Potter