Target: ₹2,273

CMP: ₹2,189.50

Cement demand remains muted, especially in the key Eastern region, where demand has struggled over the last 5 quarters. Despite the regime change in Odisha and the upcoming elections in West Bengal, demand remained muted in the last few months. East region prices improved in Apr/May along with other regions by about ₹20/bag and got cut by ₹5 in June due to early monsoon however current prices are still ₹10-15 higher than Q4FY25 average.

Southern region demand is better than the East, but is now affected by early monsoon and flood-like situations in a few regions. Prices improved by ₹50/bag in Apr/May and rolled back by ₹5-10 due to monsoon-led weakness in demand. We expect near-term performance to remain strong, led by higher pricing and flattish cost structure, which would translate into about ₹200-250 q-o-q increase in EBITDA/t from ₹926 levels of Q4FY25.

The company has already announced 6mtpa expansion projects (₹3,500 crore ) at Belgaum and Pune, which are expected to be completed by the end of FY27E to reach 55.5mtpa. Management is envisaging two similar-sized capacity addition projects via a mix of Greenfield and Brownfield routes, which is expected to be announced in the near term.

At CMP, the stock is trading at 11.9x/10.2x EV on FY26/27E EBITDA. Maintain ‘Accumulate’ rating with revised TP of ₹2,273 (₹2,117 earlier) valuing the company at 11x EV/Mar’27E EBITDA.

Published on June 26, 2025