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Informist, Friday, May 29, 2026

MUMBAI – The fundamental outlook for cement companies remains positive, however, on the technical charts, analysts expect these stocks to fall further next week. This is likely on the back of weak market sentiment after a sudden fall in the benchmark Nifty 50 index Friday. However, moderation in crude oil prices below its psychologically crucial $100 per barrel level may cushion the fall. 

The outlook for capital expenditure for the cement sector is said to be positive but may fall on a year-on-year basis, ICICI Securities said in a report. "...the cement sector's capex is likely to sustain its FY26 trend. Although, there are signs of moderation in capex spend,' the report said.

For the March quarter, cement companies under the coverage of JM Financial Institutional Securities reported a growth of 6% on year in their earnings before interest, tax, depreciation, and amortisation to INR 115 billion. "Capacity expansion deferments by larger industry players (excluding UltraTech) is constructive for the sector as the industry shifts focus on sweating out existing assets and profitability," the brokerage said in the report. The cost of raw materials is likely to go up by INR 350–INR 400 per tonne or INR 23–INR 25 per bag, the broking firm said, attributing to the companies' management.

This rise in cost of raw materials is largely attributable to higher fuel, logistics, and packaging costs. "Given the industry's fuel inventory cover of 60–90 days and recent price hikes, we expect industry profitability to remain largely resilient in Q1FY27E," JM Financial said. "Nevertheless, peak cost inflation coinciding with the seasonally weaker Q2FY27E is likely to dent profitability, in our view. We expect cement stocks to remain range-bound over the next few months amid near-term margin-related uncertainties," it added.

This week, ACC, Ambuja Cements, and Shree Cement posted 2-3% gains while JK Lakshmi Cement, India Cements, and JK Cement were the worst hit among cement companies, down 3-7% on a weekly basis. At 2142 IST, the July contract of Brent Crude oil futures was almost 2% lower at $92 per barrel on the Intercontinental Exchange. 

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* Earnings Outlook: JK Cement Jan-Mar PAT seen down YoY on higher input costs

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

US$1 = INR 95

End

Reported by Simran Rede

Edited by Akul Nishant Akhoury

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