DAM Capital has turned bullish on the cement sector, citing improving demand trends and easing competitive intensity. The brokerage believes that the industry is nearing the end of a massive consolidation phase witnessed over FY23-FY25, driven by a lack of acquisition candidates. It expects these structural shifts to reduce competitive pressures, particularly among UltraTech and Ambuja Cement, leading to a mean reversion in sector profitability.
Two key trends are driving optimism for the cement industry. First, a demand revival from December 2024 onwards, supported by government-led infrastructure spending, is expected to sustain momentum. Second, with consolidation largely completed, companies are likely to benefit from more stable pricing dynamics going forward.
In stock-specific calls, DAM Capital upgraded Ambuja Cement to ‘Buy’ with a target price of ₹555, citing favorable valuations after a sharp correction and downside protection. Shree Cement (TP: ₹32,000) and UltraTech Cement (TP: ₹12,200) remain its top picks in the sector. The brokerage retained a ‘Buy’ rating on Ramco Cement (TP: ₹905), while maintaining a Neutral stance on Dalmia Bharat (TP: ₹1,750), Nuvoco Vistas (TP: ₹320), and ACC (TP: ₹2,010).
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