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HSBC expects these five cement stocks to rise up to 24%
Recent major deals in the Indian cement sector has accelerated the pace of consolidation and will likely drive prices, analysts at HSBC said.
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Brokerage firm HSBC in its latest note remained bullish on India's cement sector, picking five stocks which could see strong rise from current levels. Recent major deals in the Indian cement sector has accelerated the pace of consolidation and will likely drive prices, analysts at HSBC said.
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UltraTech Cement remains HSBC's top pick with 'Buy' rating. The international brokerage increased the target price for the stock to Rs 15,410 per share. This implies an upside potential of nearly 24 percent from the stock's previous closing price. The shares of the cement company increased 1.3 percent to close at Rs 12,595 apiece.
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HSBC upgraded rating on Ambuja Cements to 'Buy' from 'Hold', citing cost saving measures and improved capacity at acquired plants. It raised its target price for the stock to Rs 700 per share, from Rs 490 per share. The latest target price implies an upside potential of more than 23 percent from the stock's previous closing price of Rs 568.75 apiece. The shares of the company closed over 1 percent higher at Rs 574.65 apiece.
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It also upgraded its rating on Shree Cement to 'Hold' from 'Reduce' with a price target of Rs 32,200 per share from Rs 22,000 earlier. The latest target price implies an upside potential of nearly 10 percent from the previous closing price of Rs 29,275 per share. The stock closed 1 percent higher at Rs 29,595 per share.
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It has maintained its 'Buy' rating on Dalmia Bharat and raised its target price by 45 percent to Rs 2,900 from Rs 2,000 as the firm could benefit from improved pricing in the South and East regions of the country. The latest target price implies an upside potential of more than 20 percent over the previous closing price of Rs 2,415 apiece. The stock closed 0.7 percent higher at Rs 2,431 per share.
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HSBC has a 'Hold' rating on ACC Ltd. with a revised price target of Rs 2,040 from Rs 2,100 earlier. The latest target price implies an upside potential of nearly 10 percent from the previous closing price of Rs 1,860.80 apiece. ACC shares closed in the green at Rs 1,867 apiece.
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HSBC said top four firms in the sector - UltraTech, Ambuja Cements, Dalmia Bharat, Shree Cement - now have combined market share of 57 percent, adding that the top four will likely dominate capacity additions in FY26, which will peak in the fiscal.
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HSBC expects demand recovery in the sector from the second half of FY26 as government spending will likely boost annual demand growth and sees rise in prices from November onwards.
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