Amid a rally in cement stocks, UltraTech Cement crossed Rs 3 lakh crore market cap for the first time. With this, the cement maker has become the 20th largest company in India. It was also the leading Nifty 50 gainer of the day.
Cement stocks soared on December 27 following an upgrade by Nomura on anticipated robust growth in sales volume, improved pricing discipline, and advancement of valuations to FY26.
UltraTech Cement rose more than 4 percent to Rs 10,453 with a market cap of Rs 3.01 lakh crore. The brokerage house upgraded Ultratech Cement from 'neutral' to 'buy'. It has set a target price of Rs 11,500 for the stock.
The Indian cement industry showed robust volume growth of 17 percent year-on-year in the first half of FY24. The momentum is expected to persist in the second half, anticipating an 11 percent increase in sales volumes from the first half and a 13 percent year-on-year surge, Nomura said.
The broker has revised its industry volume growth estimate to 12 percent for FY24, up from 8 percent earlier.
"For FY25, cement demand, in our view, is likely to moderate as infrastructure project launches typically slow down in the country in a general election year. However, the demand should remain higher than the past 10-year CAGR of 4 percent, largely due to the central government’s continued thrust on infrastructure, stable demand from rural and affordable housing and a pickup in urban housing. We expect a 5 percent CAGR in cement demand over FY24-26, but weak rural demand poses a downside risk," Nomura said in its note.
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