More Stories

Informist, Friday, Jul 25, 2025

MUMBAI - Shares of cement companies are likely to see a near-term fall due to weakness in operating performance reported by some major players for the June quarter. Many cement companies closed lower this week though strong on-year earnings growth is expected for the sector for the reporting quarter. However, the long-term outlook for the sector remains bullish, particularly on the back of a likely robust pick-up in the government's capital expenditure, higher demand after monsoon, volume growth, better pricing, and more infrastructure-related projects. 

Investors did not seem to cheer UltraTech Cement and ACC's robust growth in revenue as well as net profit for the latest quarter. Some broking firms said the operating performance of these companies were weak and their expenses have risen from the year-ago period. 

For large-cap player UltraTech, capacity utilisation declined to 77% from 95% a quarter ago and from 83% a year ago, suggesting the company is struggling to fully absorb fixed costs amid ongoing capacity expansions, YES Securities said in its post-earnings report. The brokerage's view is bearish on the company due to the weak performance of the acquired assets--India Cements and Kesoram Industries--and high valuations.

The sharp rise in ACC's expenses offset the impact of growth in its top line. The company reported lower-than-expected consolidated net profit on Thursday, following which its share price fell for the second consecutive session and ended over 2% lower at INR 1,847.70 on the National Stock Exchange. The stock closed in the red for the second straight week, falling almost 7% during this period. 

Ambuja Cement is scheduled to release its results Thursday. The company's consolidated net profit is expected to rise nearly 40% on year to INR 8.95 billion and revenue is likely to rise 17% to INR 97.18 billion, according to the average of estimates from 12 broking firms. Compared with the previous quarter, the bottom line is seen falling over 6% and the top line will likely decline almost 2%. 

The overall domestic equity market, too, fell sharply to hit its one-month low Friday amid subdued earnings growth, likely selling pressure from foreign investors, and the delay in trade deal between India and the US. While the Indian stock market is expected to see a further correction in the near term due to its expensive valuation, analysts believe the fall will be limited as the country's long-term growth prospects are intact. 

TOP HEADLINES
* Earnings Review: ACC Q1 revenue beats Street but PAT trails on higher cost
* Earnings Outlook: ACC's Q1 PAT, sales seen up YoY on higher volume, prices
* Dalmia Bharat to spend INR 32.57 bln to expand capacity in Andhra, Tamil Nadu
* Dalmia Bharat Apr-Jun consol PAT up over twofold YoY at INR 3.93 billion
* Earnings Review:UltraTech Cement Apr-Jun PAT jumps 49% YoY on increased sales
* Analyst Concall: UltraTech to detail capex plan for India Cements Jul-Sept
* DCM Shriram Apr-Jun consol PAT rises 13% YoY to INR 1.13 billion
* Earnings Review: UltraTech Cement Apr-Jun PAT jumps 49% YoY on lower costs
* SC allows Adani Cementation to cut mangrove trees to construct Raigad jetty
* India Cements posts net loss of INR 137.6 million in Apr-Jun vs PAT year ago
* JK Cement Apr-Jun PAT rises 65.6% on year to INR 3.36 bln; revenue up 19.2%

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony
Edited by Subhojit Sarkar

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.