The outlook for the sector is additional bolstered by the prospect of a Items and Companies Tax (GST) discount beneath the federal government’s second-generation reform drive. A minimize in GST is predicted to boost affordability and maintain demand momentum, notably in infrastructure and housing segments.
With demand comparatively inelastic to cost adjustments, trade volumes are estimated to develop at 7–8% in FY26, aided by authorities spending, rural restoration submit a positive monsoon, and rising industrial capex.
Regionally, cement costs have been steady throughout most markets in August, although some areas had witnessed marginal corrections earlier within the quarter.
Demand tendencies have been uneven because of heavy rains however are anticipated to rebound post-monsoon, led by accelerated execution of infrastructure tasks, reasonably priced housing schemes, and concrete actual property restoration.
The southern market, which confronted non permanent demand moderation, is predicted to see renewed momentum within the second half of FY26 as states push infrastructure revival efforts.
On the associated fee entrance, the sector continues to learn from favorable gasoline dynamics. Imported coal costs have been down ~21% year-on-year in August, whereas petcoke costs softened 2% throughout the identical interval.
These tendencies have supported margins, with trade spreads remaining regular at the same time as realisations dipped marginally quarter-to-date. Nevertheless, profitability might witness some sequential strain because of detrimental working leverage within the present quarter.
Wanting forward, the medium-term outlook for the cement trade stays constructive. Steady pricing, government-led infrastructure enlargement, potential tax reforms, and sustained demand progress present a powerful basis for earnings enchancment in FY26.
With consolidation gaining tempo and enter prices trending favorably, the sector is well-positioned to ship wholesome efficiency, reinforcing its position as a key beneficiary of India’s ongoing infrastructure and housing cycle.
UltraTech Cement: Purchase| Goal Rs 14,600| LTP Rs 12524| Upside 16%
UltraTech Cement reported robust Q1 outcomes with consolidated income up 13% YoY to INR 212.8 b, led by 10% quantity progress and three% higher realizations. EBITDA rose 46% YoY to INR 44.1 b as improved pricing and three% decrease opex/t drove profitability.
Working margin expanded ~470 bps YoY to 21%, because of Combine of higher realizations and sharper value management. PAT rose 44% YoY to INR 22.5 b. RMC income jumped 23% YoY on robust infra and housing demand. Integration of ICEM & Kesoram belongings is on monitor, aiding value effectivity.
Capex of INR 100 b for FY26 is well-managed, with steady debt. Administration expects rural and concrete housing to gasoline additional progress. We assign a BUY ranking, pushed by margin tailwinds, value management, and wholesome demand outlook.
Dalmia Bharat: Purchase| Goal Rs 2,660| LTP Rs 2351| Upside 13%
Dalmia Bharat is positioned to learn from sustained cement demand, supported by its capability enlargement roadmap, effectivity measures, and concentrate on sustainability. The corporate goals to scale cement capability to 110–130mt by 2031 by brownfield and greenfield tasks.
Alongside, logistics optimization and renewable power initiatives are anticipated to strengthen competitiveness and scale back prices. We count on volumes to enhance as new capacities ramp up, aided by regular demand in core markets.
The corporate’s rising use of other fuels and renewable energy will additional improve value effectivity and profitability. We estimate Income/EBITDA/PAT CAGR of 10%/25%/37% over FY25-27.
(The writer is Head – Analysis, Wealth Administration, Motilal Oswal Monetary Companies Ltd. Views are personal)
(Disclaimer: Suggestions, solutions, views, and opinions given by consultants are their very own. These don’t characterize the views of the Financial Instances)
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