Best cement stocks 2025: Demand revival, pricing trends and growth prospects

JK Cement

One should consider going long at current levels or on dips near ₹4,800 with a stop below ₹4,750 for a rise towards ₹5,500 in the next three months.

Ramco Cement

The trends suggest we should consider some upside towards ₹985 and ₹1,030 in the next three months as long as ₹850 level holds on the downside.

Dalmia Bharat

The charts clearly spell out a strong target zone in the region of ₹1,950-2,025 in the next three months until ₹1,770 is not sacrificed on the way down.

These candidates have been considered based on a mix of parameters that address the cement industry.

Let us look at the sector dynamics and challenges that lie ahead for the industry.

Also Read: Is the cement sector consolidation at its fag end?

Sector dynamics and consolidation

In recent years, the cement industry has undergone significant consolidation. As of fiscal year 2024, 51 million tonnes (MT) of capacity had already changed ownership, with an additional 14 MT in buyouts announced. This phase of consolidation, accounting for approximately 11% of the total installed capacity, marks the highest activity within a two-year period.

Companies like UltraTech Cement and Ambuja Cement have led this wave, enhancing their market reach and operational efficiencies. According to Crisil Ratings, this consolidation offers acquirers benefits such as wider geographical coverage, access to critical limestone reserves, and economies of scale. These factors are expected to outweigh the modest rise in financial leverage, ultimately improving credit profiles.

Also Read: Another headache for cement cos amid weak prices?

Demand recovery and growth drivers

Demand for cement in India is poised for a strong bounce back, driven by various structural factors:

Housing and Real Estate: Both rural and urban housing demand are expected to remain strong.

Infrastructure Investments: Government-led projects under the National Infrastructure Pipeline (NIP) and increased spending on roadways, metro rail, and renewable energy will bolster demand.

Commercial and Industrial Development: A resurgence in commercial and industrial construction will complement overall growth.

Cost savings and price stabilization

The sector has witnessed notable structural cost savings, stemming from efficiency improvements and the adoption of sustainable technologies. Furthermore, after an 8% decline in prices during the first nine months of FY25 (9MFY25), price stabilization is on the horizon, further supporting margins. With reports highlighting strong demand and margin tailwinds as key factors for optimism.

Also Read: Tamil Nadu’s limestone tax: A crushing blow to cement margins?

Challenges

While the sector’s prospects are promising, challenges persist:

Environmental Compliance: Stricter carbon emission regulations require investments in sustainable practices, adding to costs.

Raw Material Costs: Rising costs of limestone and energy inputs continue to exert pressure on margins.

Debt Levels: Consolidation has led to increased financial leverage among acquiring firms, potentially constraining organic growth.

Based on the above parameters, here are three stocks that we can consider this week:

JK Cement

JK Cement closed 3.68% higher at ₹4,885.80 on Friday, marking its best percentage gain in nearly four months. The stock received a boost after Jefferies reiterated it as the top midcap pick. After a muted first half of FY25, management commentary highlighted improved cement demand growth in the second half of FY25 compared to the flat year-on-year growth in the first half.

With hopes of a return of rural demand, which constitutes 50% of JK Cement’s trade sales, leading to stabilized pricing trends. Furthermore, JK Cement is targeting approximately 10% volume growth in FY26 and expects pricing to improve by ₹100 per tonne quarter-on-quarter in Q4FY25. Over the last 12 months, JK Cement shares have gained around 20%.

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The large-scale decline seen in this counter over the past few weeks has led to some particle exits from many portfolio holders. However, the recent pullback towards ₹4,400 region in March 2025 made a higher low. If one were to observe over the last few months, the stock has been making a strong attempt to tread higher. Every pullback in this counter has been received with some demand. The last dip near the value support region, combined with some short covering in the market, resulted in a strong rebound. A V-shaped recovery has once again reinstated the bullish bias in the last few days to breach open the strong resistance zone around ₹4,800, calling for some bullish momentum. One should consider going long at current levels or on dips near ₹4,800 with a stop below ₹4,750 for a rise towards ₹5,500 in the next three months.

Ramco Cement

Ramco Cements faced a challenging FY25, with Q3 results reflecting a 6% year-on-year decline in revenue to ₹1,977 crore. Profit before exceptional items and tax from its cement business plummeted to ₹4.35 crore, a sharp drop from ₹135 crore in the same period last year. Despite these setbacks, the company recorded a one-time gain of ₹329 crore through the sale of surplus land and investments, providing temporary financial relief.

To boost sales further, Ramco has also commissioned new facilities, such as Line 2 in Odisha, which is expected to bolster production capacity and position the company for future growth.

In the last year, Ramco Cements has demonstrated resilience through strategic initiatives. While challenges persist, its emphasis on capacity expansion and operational efficiency sets the stage for a potential turnaround in FY26 and beyond.

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In December 2024, prices were about to create a record by edging out their December 2023 highs, but bearishness dragged the prices lower towards an important value support region around ₹800. After a 25% decline, the prices started stabilising. After some sharp descent, bullish momentum resumed in the last few days.

The revival spirits led to a breakout of the trendline resistance from its December 2024 high. This break and hold of the resistance now can trigger some revival if the sector tailwind combines with the price action. The trends suggest that we can consider some upside towards 985 and 1030 in the next three months as long as ₹850 levels hold on the downside.

Dalmia Bharat

Dalmia Bharat fortunes remains suppressed in large part of FY25, in Q3FY25 the company reported a 77% year-on-year decline in net profit to ₹61 crore, compared to ₹263 crore in the same period last year. Amid this challenging backdrop, Dalmia Bharat remains focused on growth. Its capacity expansion efforts are progressing well, with plans to ramp up production to 49.5 mtpa by the close of FY25 from the current capacity of 46.6 mtpa. To strengthen its sustainability initiatives, the company has secured agreements for an additional 21 MW of renewable energy capacity, adding to the 278 MW commitments made earlier this fiscal year.

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This stock has been experiencing some volatile trends in the last few weeks. The zig-zag moves seen in the last few weeks have been a testament to the fact that the stock is actively tracked and traded. With recent moves showing a nice descending channel breakout, we now have potential for more upside.

As favourable factors provide some sector tailwind, one should consider going long in this counter. The charts clearly spell out a strong target zone in the region of ₹1,950-2,025 in the next three months until ₹1,770 is not sacrificed on the way down.

Outlook

The outlook for the Indian cement sector in 2025 and beyond remains optimistic, underpinned by government-led infrastructure growth and sectoral consolidation. The general consensus predicts robust volume growth supported by key demand drivers across housing, infrastructure, and commercial segments. Additionally, consolidation is set to improve operational efficiencies and pricing stability in the medium term.

In summary, while challenges such as environmental compliance and input cost pressures remain, the Indian cement industry is positioned for a promising recovery. Backed by structural cost savings, price stabilization, and strategic consolidation, the sector is well placed to achieve sustainable growth in the coming years.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.