Ultratech, Ambuja, ACC and other cement stocks surge as GST rate cut to 18% boosts outlook

Cement stocks surge as GST rate drops to 18 percent

Cement stocks gained strongly on September 4 after the GST rate on cement was reduced to 18 percent from 28 percent, with shares of Ultratech Cement, Ambuja Cements, ACC, Shree Cement, and others rising between 2-3 percent.

The GST reduction is expected to provide significant relief to the real estate and infrastructure sectors. Analysts said it could boost demand in the housing segment, as lower construction costs may be passed on to buyers, making homes more affordable.

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The new GST rate will take effect from September 22, 2025, and applies to all major categories of cement, including Portland cement, aluminous cement, slag cement, super sulphate cement, and similar hydraulic cements, whether coloured or in clinker form. These products, previously taxed under the highest 28 percent slab, will now fall under the 18 percent bracket.

The reduced tax burden is likely to lead to lower retail cement prices, potentially spurring higher offtake from both retail and institutional buyers.

Global brokerage Jefferies described the GST cut on cement as a strong positive for the sector, calling it a long-awaited move that could structurally improve industry dynamics. While Jefferies does not expect a major surge in demand purely from price elasticity, it noted that the new tax regime could aid pricing discipline and support profitability in the medium term.

The brokerage also highlighted that companies will now be able to claim full input tax credit on coal—a key raw material—following the increase of GST on coal to 18 percent from 5 percent.