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Informist, Friday, Sept. 19, 2025

MUMBAI – Shares of cement companies are expected to rise gradually in the near term on expectations of better demand post monsoon, improvement in pricing, and higher capital expenditure by the government. Some analysts said they expect cement prices to start rising from November and that the government's capital expenditure has improved so far in 2025–26 (Apr-Mar) compared to the muted trend in FY25.

Analysts expect cement companies to pass the full benefit of GST rationalisation to customers in the near term, but they are likely to hike prices in the medium-to-long term, possibly during the June quarter of next year. The government eased the GST on cement to 18% from 28% earlier as part of its tax rationalisation policy.

In the June quarter, the central government's capital expenditure increased 52% on year but fell 10% on year in July due to intensified rains, they said. For FY26, the government has budgeted a capital expenditure of INR 11.2 trillion, 31% of which was incurred in Apr–Jul.

Companies are also expected to increase their cement capacity in the current financial year. "We expect the top four (cement) companies, which now have a combined market share of 57%, to dominate capacity additions which we think will peak in FY26 and then moderate," HSBC Global Investment Research said in its report Tuesday. Its top pick in the sector is UltraTech Cement, for which the broking firm has a 'buy' rating and a target price of INR 15,410.

It has upgraded Ambuja Cement's rating to 'buy' from 'hold' and also raised the target price to INR 700 from INR 490 earlier. The new target price is 20% higher than the stock's closing level of INR 582.45 Friday on the National Stock Exchange. The upgrade is based on expectations of cost savings on the back of new clinker kilns and cost improvements at acquired capacities, it said.

HSBC Global has also upgraded Shree Cement to 'hold' from 'reduce' and increased the target price to INR 32,200 from INR 22,000, indicating an almost 8% upside from the closing level of INR 29,880 Friday. The company is expected to benefit from improved pricing in south and eastern parts of India, it said.

TOP HEADLINES
* HC sends Ambuja Cements, JSW Cement to mediation in trademark case
* HSBC raises large cement cos' target prices on likely price hikes from Nov

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 Ashish Shirke

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