Ambuja Cement — Nirmal Bang's Top Stock Bet In Cement Sector; Q1 Results Preview

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Nirmal Bang Report

The Indian cement industry is poised for steady growth in FY26 supported by multiple structural and cyclical drivers. Robust infrastructure spending continued its momentum in the real estate and housing sectors (both urban and rural), and government-led capex—particularly in roads, metro, and housing schemes—should drive demand.

While early monsoons impacted volumes in Q1 FY26, we expect the demand to recover over the balance of the year, leading to industry-wide volume growth of ~6-7% YoY.

Consolidation in the sector and disciplined capacity additions are likely to result in a more stable pricing environment, which, along with easing input costs, should support margin improvement. Ebitda/tonne is expected to see a healthy sequential recovery, though it may remain slightly below last year’s peak.

Overall, FY26 should see a balanced growth trajectory with volume recovery, stable prices, and improving profitability, keeping the sector attractive for investors over the medium term.

Ambuja Cement remains our preferred choice among large-cap stocks with Ramco Cements and Nuvoco Vistas closely behind.

Downside risks for the Indian cement industry in FY26:

Weak or uneven monsoon:

Below-average rainfall or poor spatial distribution could dampen rural housing demand and construction activity.

Sharp rise in input costs: Unexpected spikes in coal, petcoke, diesel, or freight costs could squeeze margins despite stable prices.

Global macro volatility: Geopolitical tensions or commodity price shocks could indirectly affect costs and currency, adding to margin pressure.

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