Ambuja, UltraTech, Shree Cement Get Sharp Target Price Hikes — HSBC Bullish On Top Players

Consolidation in the cement industry will drive price discipline and benefit large players like Ambuja Cement Ltd., UltraTech Cement Ltd., and Shree Cement Ltd., according to multinational investment firm HSBC. Analysts sharply raised the share price targets for these companies.

"We expect the top four companies, which now have a combined market share of 57%, to dominate capacity additions, which we think will peak in FY26 and then moderate," an HSBC note said.

Analysts said they expect cement prices to start rising in the high single digits starting in November, leading to a rise in Ebitda per ton by 4.3% and production capacity over the next three years.

Demand will recover after a weak FY25, given that a large base and steady government support will see demand growth normalize in the 6-7% range annually over the next three years.

The GST Council slashed the tax rate on cement to 18% from 28%, effective Sept. 22. Analysts at Nomura have said the GST cut is structurally positive for the industry, as it would make premium and Category A products more affordable for customers, thus increasing the adoption rate.