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Informist, Friday, Oct 10, 2025

MUMBAI - Shares of cement companies are likely to remain in a tight range until the earnings of companies are released and the monsoon rains end. Jul-Sept is a seasonally weak quarter for cement companies due to lower demand because of the rains. Analysts said that cement prices fell during the quarter, with southern regions seeing a higher fall in prices than other regions. While the benefits of the government's goods and services tax cuts are passed on to customers, analysts do not expect it to have any major impact on price realisations. 

For the September quarter, the aggregate net profit of four cement companies, which are part of the Nifty 200 index, is likely to rise 76% on year to INR 27.55 billion and revenue is likely to grow 18% to INR 371.47 billion, according to estimates from eight broking firms. However, this would translate to a 31% sequential fall in the bottom line and a 13% decline in the top line due to seasonal weakness of the reporting quarter. 

Emkay Global Financial Services expects lower cement volumes to trigger negative operating leverage. This will likely lead to a rise in operating costs by more than 2% sequentially or INR 100 per tonne. The broking firm has a 'buy' or equivalent rating on eight cement companies under its coverage. It estimates earnings before interest, tax, depreciation, and amortisation of these companies to surge 56% on year in the latest quarter due to a low base on the General Elections. "... we see the industry logging a low single-digit (3-4%) YoY volume growth in Q2FY26E (Jul-Sept)," it said in its report. 

Broking firms said energy costs are expected to remain rangebound during the reporting quarter, which will support operating margins. Power and fuel costs fell 9% on year in the reporting quarter, aided by a 20% fall in coal prices, Nirmal Bang Institutional Equities said in its earnings preview report. "While Q2 (Jul-Sept) margins may contract sequentially due to seasonality, they are expected to remain 35% higher YoY," it said. 

This week, shares of cement companies saw muted gains, with JK Cement rising the most by almost 5% and Andhra Cement gaining almost 4%. On the other hand, JK Lakshmi Cement and Ambuja Cement fell the most by nearly 1% each. 

TOP HEADLINES
* JSW Cement arm Shiva Cement commissions new cement grinding unit in Odisha
* Astral commissions commercial production at its Kanpur plant

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:

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Reported by Anjana Therese Antony
Edited by Saji George Titus

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