JPMorgan has flagged caution on the Indian cement sector, warning that investor optimism around pricing resilience into the monsoon season may be short-lived. The brokerage observed that large cement companies appear to be holding prices better than usual despite seasonal weakness, but said this is unlikely to sustain given emerging competitive pressures.
It noted evidence that smaller players are gaining volumes through increased downtrading, while EBITDA expectations for the second half of FY26 appear too aggressive, with forecasts implying 20–33% year-on-year growth for large caps excluding ACC. JPMorgan also expects the post-Diwali demand rebound this year to be softer than in FY25 due to constrained government infrastructure spending amid weaker tax revenues. In addition, recent capacity additions are likely to weigh on overall industry utilisation rates, creating further pressure on margins.
The brokerage said that while large-cap cement stocks could face near-term earnings downgrades, it remains selective within the sector. It prefers UltraTech Cement (UTCEM) for its medium-term volume growth visibility and ACC for its more attractive valuations and lower expectations.
Disclaimer: The views and recommendations made in this article are those of JPMorgan. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
