The recent surge in cement prices signals a promising landscape for investors, with Western India seeing the highest price surge of Rs 350-400 per 50 kg bag and other regions experiencing even more substantial increases. This price escalation, driven by increased real estate demand and improved labour availability, suggests a potential turning point for cement stocks.
Following is a list of cement stocks to buy for upside potential:
1. Shree Cement
Headquartered in Kolkata and founded in 1979, it is one of India’s top cement producers, known for operational efficiency and a strong market position. Shree Cement offers a range of products, including Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC), and generates power through waste heat recovery systems.
Focused on expansion, the company aims to grow its capacity from 44.4 MTPA to over 50 MTPA by 2025 through both brownfield and greenfield projects. Shree Cement prioritises sustainability by utilising alternative fuels and raw materials, demonstrating a commitment to reducing its environmental impact while expanding its market presence.
Sharekhan has retained a “Buy” rating on Shree Cement with a revised price target of Rs. 28,800, a 5.4% upside from current levels. The rationale is even though operational profitability is impacted by lower-than-expected volume growth. Despite this, standalone revenues were steady, with EBITDA/tonne exceeding estimates due to lower power and fuel costs. Management reaffirmed volume growth aligned with industry trends and highlighted capacity expansion plans to exceed 80 MTPA by 2028. Positive demand in H2FY2025 is expected to support cement price improvement, while annual capex of Rs. 4,000 crore remains consistent.
With a market capitalisation of Rs. 98,567 crores, Shree Cement Limited’s share price is trading at Rs. 27,318 per equity share with a P/E of 56.47.
2. Ambuja Cements Limited
Part of the Adani Group since its founding in 1983, it has established itself as one of India’s leading cement manufacturers. Headquartered in Mumbai, Ambuja produces a variety of cement types, including OPC, PPC, and speciality cements for specific applications.
The company is actively expanding its capacity to meet rising demand, focusing on sustainability and environmental impact reduction. Through green building initiatives, Ambuja Cements emphasises sustainable construction practices, making it a leader in environmentally conscious manufacturing within the Indian cement industry.
Motilal Oswal Financial Services has given a “Buy” rating on Ambuja Cements with a target price of Rs 710, an upside of 23.1% from current levels. The rationale includes its strong net cash position, ability to generate operating cash flows, and benefits from demand recovery post-festive season, driven by infrastructure and construction activities. Despite challenges in 1HFY25, Ambuja’s pan-India presence and cost-saving measures position it well for growth.
With a market capitalisation of Rs. 1,42,048 crores, Ambuja Cements Limited’s share price is trading at Rs. 576 per equity share with a P/E of 36.61.
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3. UltraTech Cement Limited
Established in 1983 and a key part of the Aditya Birla Group, it holds the title of India’s largest cement producer. With headquarters in Mumbai, UltraTech offers a broad product portfolio, including grey cement, ready-mix concrete (RMC), and white cement. Committed to growth.
The company aims to increase its production capacity to 200 million tonnes per annum (MTPA) through ongoing expansions and acquisitions, with a significant focus on key domestic markets. UltraTech also has a substantial export footprint, providing its products internationally and reinforcing its role as a major global player in the cement industry.
Geojit Financial Services has given a “Buy” rating to UltraTech Cement with a target price of Rs 12,320, an upside of 3.4% from current levels, citing the company’s potential to benefit from industry growth driven by rural demand, infrastructure development, and urbanization. Despite weak operating performance due to subdued demand and pricing, UltraTech’s strategic acquisitions and capacity expansion plans position it well for future opportunities. The valuation is based on 20x FY26E EV/EBITDA.
With a market capitalisation of Rs. 3,44,165 crores, UltraTech Cement Limited’s share price closed at Rs. 11,921.3 per equity share with a P/E of 51.87.
Written By Fazal Ul Vahab C H
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