Ambuja Cements, UltraTech Remains Systematix' Top Stock Picks In The Sector — Here's Why

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Systematix Report

The Indian cement industry is on track for steady expansion, with demand anticipated to grow by 4%-5% in FY25E and gain further momentum to 6%-7% in the following years.

Cement prices have witnessed a notable recovery, with all-India average prices rebounding to Rs 371 per bag from the August 2024 low of Rs 337/bag, reflecting a 10% improvement. Moreover, companies shift focus from consolidation to organic growth—driven by improved performance, efficiency, and margins— cement prices are expected to rise steadily over the medium term.

Since the end of Q3, prices across most regions have increased by 3%-4%, supported by a seasonal pick-up in demand. While most regions are targeting a price hike of Rs 20-25 per bag, its sustainability remains an overhang, as manufacturers may prioritize volume growth over pricing discipline to meet year-end sales targets. Additionally, demand could experience a temporary dip in certain regions due to disruptions caused by the Holi festival.

Ultratech and Ambuja Cements remain our top picks within the coverage universe with a target price of Rs 12,660 and Rs 654, respectively.

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