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Informist, Friday, May 9, 2025

MUMBAI – Cement prices may face pressure in view of the approaching monsoon, which usually leads to lower demand for cement, analysts said. Amid this, high valuation of several companies in the cement sector could lead to range-bound movement or a fall in cement stocks. 

"The cement sector can see a drop in prices after mid-June, as monsoon season arrives in most of the states of the country. The monsoon season can negatively impact the cement sector by disrupting construcion projects, increasing costs and affecting cement quality," an analyst covering the sector at a domestic brokerage said.

While cement stocks are seen under selling pressure in the near term, analysts are largely bullish in the long term. Higher spending by the government and aggressive capacity expansion by major companies is likely to benefit the sector, Emkay Global Financial Services said in a report Wednesday.

The brokerages said several projects are in the pipeline, which could aid cement companies. The government's upcoming Pradhan Mantri Awas Yojana 2.0, to construct 30 million homes by 2029, could generate an incremental 20 million tonnes of cement demand annually, the brokerage said.

Several Indian cement makers are likely to increase their capacity significantly over the coming years. UltraTech Cement is expected to increase its capacity to 210.50 mtpa by FY27 from 183.40 mtpa at the end of March. UltraTech's heavy capex programme, covering organic expansion, acquisition, and the refurbishment of India Cements and Kesoram Industries, signals the company's intent to dominate the cement space, according to a report by brokerage Nomura post the company's earnings last week.

Among another major companies, Ambuja Cement aims to increase its capacity to 118 mtpa by the end of 2025-26 (Apr-Mar) from over 100 mtpa at end of March quarter. Analysts are watchful of how it ramps up recently acquired assets, controls unit operating costs, and captures market share. Nuvama Institutional Equities said lower fuel prices could support Ambuja Cement's margin in the near term.

Shree Cement will report its quarterly earnings Wednesday. The company's net profit for the March quarter is expected to decline 22% to INR 5.17 billion, according to estimates by 15 brokerages. Its revenue is likely to see marginal fall to INR 50.43 billion.

TOP HEADLINES

* Gujarat Mineral inks pact with city gold to supplu 150 million tonnes of limestone

* UltraTech Cement's production capacity rises to 1.4 million tonne per annum 

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Ishaan Sharma 

Edited by Avishek Dutta

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