SUMMARY
Among the key themes for 2025, CLSA has cited a demand recovery in the offing for the sector. It also expects consolidation and capacity expansion to continue and profitability for these companies to be aided by a low base and cost savings.
1 / 7Brokerage firm CLSA has turned constructive on the cement sector in a note on Wednesday, January 8, as earnings visibility for the sector improves and pockets of opportunity arise for companies.
2 / 7Among the key themes for 2025, CLSA has cited a demand recovery in the offing for the sector. It also expects consolidation and capacity expansion to continue and profitability for these companies to be aided by a low base and cost savings. Here is what CLSA said for Cement companies going forward:
3 / 7ACC | The brokerage has upgraded the Adani Cement company to “outperform” from its earlier rating of “hold”. It has also raised its price target of ₹2,580 from ₹2,500 earlier. The brokerage cited the stock’s recent underperformance as the key factor behind the upgrade. However, it prefers to play the Adani Group’s focus on market share gains and profitability uptick through Ambuja.
4 / 7Ambuja Cements | CLSA has maintained its outperform rating on the stock but cut its price target to ₹635 from ₹645 earlier. Yet, the revised price target implies a potential upside of 19% from Tuesday’s closing levels. Ambuja is slated to commission 14 MT of cement capacity expansion projects and is also likely to make headway on several cost saving initiatives, according to CLSA.
5 / 7Dalmia Bharat | The other cement stock that has been upgraded by CLSA to “outperform” from its earlier rating of “hold” earlier. The brokerage has raised its price target on the stock to ₹2,110 from ₹1,835 earlier, which implies a potential upside of 18% from Tuesday’s close. CLSA said that the lack of medium-term growth visibility for Dalmia Bharat is more than factored in at current valuations.
6 / 7UltraTech Cement | CLSA has a “hold” rating on India’s largest cement company. It revised its price target higher to ₹12,015 from ₹11,500 earlier, which implies a potential upside of 4% from current levels. It said that the risk-reward for UltraTech is balanced at current levels.
7 / 7Ramco Cements | CLSA maintained its “reduce” rating on Ramco Cements but raised its price target higher to ₹855 from ₹710 earlier. The revised price target also implies a 11% downside from current levels. The brokerage said that it has remained cautious on the stock as it awaits more visibility on the medium-term growth outlook for the company.
