Why Is Antique Research Bullish On Cement Stocks Despite Muted Demand?
UltraTech Cement, Shree Cement, and JK Cement are among the most influential players in India’s cement sector, each bringing unique strengths to the table. UltraTech, the largest cement producer in India and part of the Aditya Birla Group, boasts a capacity of over 150 million tonnes annually and a strong pan-India presence. Shree Cement is known for its cost efficiency and sustainable practices, while JK Cement has carved a niche in the white cement and wall putty segment alongside its grey cement operations. Antique Research has reaffirmed its bullish stance on these companies, citing a resilient industry structure, steady pricing trends, and the potential for a medium-term profitability reset. This analysis explores sector dynamics, price trends, demand challenges, and long-term investment opportunities.
How Have Cement Prices Been Trending?
On a quarterly basis, average prices are down by 1.7% in 2QFY26, though they are still up 6% year-on-year due to a low base. Over a two-year CAGR, prices remain largely flat, indicating resilience even in challenging demand conditions. This price stability reflects the industry’s consolidated structure and disciplined pricing strategies by leading players such as UltraTech, Shree, and JK Cement.
What Is The Current State Of Demand?
Monsoons typically dampen construction activity, and this year’s extended rainfall has further slowed infrastructure projects and rural demand. Additionally, the festive season temporarily shifts consumer focus away from construction spending. However, demand is expected to recover in the second half of the fiscal year, supported by government-led infrastructure spending, housing projects, and urban development initiatives. Over the medium term, cement consumption in India remains structurally strong, underpinned by rapid urbanization and rising per-capita cement usage.
How Are Profitability Levels Shaping Up?
While historical profitability has been modest, Antique Research expects a medium-term reset. This will be driven by cost optimization, energy efficiency, and premium product offerings. Companies like Shree Cement are leveraging sustainable fuel sources and efficiency improvements, while UltraTech’s scale and distribution network allow it to command better margins. JK Cement, with its differentiated white cement portfolio, enjoys pricing power that supports steady profitability.
Which Stocks Are Best Positioned For Growth?
UltraTech’s leadership position and diversified portfolio give it unmatched scale advantages. Shree Cement stands out for its operational efficiency and aggressive capacity expansion plans. JK Cement offers a mix of strong regional presence in North India and niche leadership in white cement and wall putty. Together, these stocks represent a balanced mix of growth, stability, and premium product positioning, making them attractive investments in the cement sector.
What Is The Outlook For The Sector?
While short-term challenges such as monsoon disruptions and muted demand persist, the long-term trajectory for the cement industry remains robust. Rising government spending on highways, housing schemes like PMAY, and smart city projects will drive incremental cement consumption. With disciplined capacity additions and favorable pricing strategies, sector leaders are expected to maintain stability and deliver shareholder value. Investors should view temporary softness as an opportunity to accumulate quality stocks at reasonable valuations.
Investor Takeaway
Cement prices remain stable despite muted demand, signaling sector resilience. Profitability, though modest historically, is poised for a medium-term re-set, driven by efficiency gains and steady demand recovery. UltraTech, Shree, and JK Cement stand out as preferred picks, offering investors scale, efficiency, and niche leadership. For long-term portfolios, these stocks provide attractive entry points into India’s infrastructure growth story.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
