CLSA has turned incrementally constructive on the cement sector, expecting demand to accelerate heading into FY26 after a weak performance last year.
The brokerage’s analysis of 15 listed cement companies suggests that Q3 saw mid-single-digit volume growth, with an uptick in December. Channel checks indicate that January saw further improvement, with 6-8% volume growth YoY, despite a high base from the previous year.
Additionally, cement prices have increased 1.5-2% above the FY25 YTD average, reflecting improving demand conditions. If these prices hold steady, CLSA believes that FY26 earnings estimates for cement companies will likely be met.
The brokerage maintains a preference for large-cap cement names like Ambuja Cements and UltraTech Cement, while also favoring Dalmia Bharat among mid-caps.
