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Informist, Tuesday, Sept. 16, 2025

--HSBC upgrades Ambuja Cements to 'buy', ups target price by 43% to INR 700 

--HSBC raises Ultratech target price by 27% to INR 15,410, retains 'buy' rtg 

MUMBAI – HSBC Securities and Capital Markets India has upgraded ratings on and raised target prices for some cement stocks. This follows the brokerage's assessment that cement prices are likely to rise in the near future following the acquisition of some smaller companies by larger players, giving them greater control over pricing.

The brokerage has upgraded the rating on Ambuja Cements to "buy" from "hold" and raised the target price by 43% to INR 700. HSBC has maintained its "buy" rating on UltraTech Cement and raised the target price by 27% to INR 15,140. It has also raised the target prices for Dalmia Bharat and Shree Cement slightly while cutting that for ACC marginally.

The brokerage said the top four companies in the sector now hold 57% market share. The brokerage also prefers larger players as the smaller companies are saddled with high debt, limiting their ability to add capacity. It expects the top four to lead in capacity addition, which is expected to peak in the financial year ending March. Backed by a steady rise in capital expenditure by the government, growth in demand is expected to normalise around 6-7% in three years.

The brokerage expects cement prices to start rising from November. It estimates cement companies' average selling price per tonne to rise 3.6% in 2026, 2.5% in 2027, and 2.1% in 2028.

Ambuja Cements is likely to benefit from higher cost saving on the back of new clinker kilns and production improvements at companies it had previously acquired. The brokerage has also factored in strong sales and higher prices while raising the target price for the company's stock.

The brokerage said the sharp rise in its target price for UltraTech Cement was driven by better-than-expected progress on cost reduction targets. It has raised the company's earnings before interest, taxes, depreciation, and amortisation estimate by 2-6% for 2025-26 (Apr-Mar) and 2026-27.  End

Reported by Eshitva Prakash

Edited by Rajeev Pai

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