While brokerage firm Nomura does anticipate the Indian cement industry to witness better volume growth in FY26 than FY25, it believes only cost focused companies would manage to witness margin expansion. On that account, Nomura sided with industry leaders as its choice within India's cement space.
Moving along that, Nomura retained its 'buy' calls on UltraTech (target at Rs 12,800), Ambuja Cements (target at Rs 690) and Ramco Cements (target at Rs 1,060).
In a contrasting move, it downgraded ACC and Nuvoco Vistas to 'reduce' from their earlier 'neutral' call. Shree Cement was also downgraded to 'neutral' from the previous 'buy' rating. Nomura also has a 'reduce' rating on Dalmia Bharat.
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Looking ahead, Nomura estimates volume growth of 6 percent for India's cement industry in FY26 as against its expectation of a mere 3 percent uptick in FY25.
However, the brokerage remains negative on the pricing outlook for the industry, as it believes pricing indiscipline amid industry consolidation will keep trade prices range-bound. "We expect cement trade prices to remain weak largely on account of market share tussle amid the ongoing consolidation phase in the industry," Nomura stated.
Meanwhile, with fuel cost moderation benefits largely behind us, Nomura prefers companies that are actively implementing sustainable cost-saving measures such as reducing thermal consumption and increasing green power mix. "As a result, we remain bullish only on those companies that are actively working towards sustainable cost-saving measures, such as Ultratech and Ambuja," Nomura added.
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