Nomura has highlighted its preference for leading cement players while cautioning against smaller and cost-challenged peers. The brokerage expects 5-6% annual volume growth for the cement industry over FY26-27F but notes that only cost-efficient companies will achieve meaningful margin expansion.
Key Highlights:
- Demand recovery expected in FY26 with moderate growth in cement prices due to ongoing consolidation.
- Cost-saving measures seen as the main driver for EBITDA per ton improvement, with limited benefits from lower fuel costs.
Recommendations:
- Buy calls:
- Ultratech Cement: Target Price ₹12,800.
- Ambuja Cement: Target Price ₹690.
- Ramco Cement: Target Price ₹1,060.
- Downgrades:
- Shree Cement: Downgraded to Neutral, Target Price ₹28,000.
- ACC: Downgraded to Reduce from Neutral, Target Price ₹1,920.
- Nuvoco: Downgraded to Reduce from Neutral, Target Price ₹330.
- Dalmia Bharat: Maintain Reduce, Target Price ₹1,680.
Nomura’s cautious outlook on price improvements emphasizes the need for efficient operations to sustain profitability in the cement sector.
Disclaimer: This article is for informational purposes only. Please consult your financial advisor before making any investment decisions.
