Cement Stocks To Buy: JK Cement, Ambuja or ACC — Which one could outperform?

Cement Stocks To Buy: Nuvama has released a detailed review report on the cement sector for Q2, highlighting the key trends in demand, pricing, profitability and stock picks.

The overall tone of the report suggests that while the quarter had its seasonal challenges, the sector is showing signs of resilience and may deliver a stronger performance in the second half of the year.

Volume, Pricing and Sector Momentum

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According to the report, volume growth remained moderate at around 5 per cent. The long monsoon season and the festive period limited construction activity, which kept demand from seeing any major spike.

Despite this, the sector maintained steady momentum. On the pricing front, realisations were flat on a quarter-on-quarter basis, but on a year-on-year basis, prices were up nearly 9 per cent, reflecting the sector’s ability to hold steady even during weaker seasonal periods.

Profitability and Cost Support

Profitability, however, was the strongest highlight of the quarter. Ebitda per tonne jumped 55 per cent year-on-year, reaching nearly Rs 940. This improvement was driven by better pricing discipline and cost efficiencies.

Companies also benefited from stable to slightly lower freight costs, which remained flat every year and declined sequentially, further supporting margins.

In terms of volume performance, Ambuja Cement, UltraTech Cement and JK Cement emerged as the top performers, each recording around 15 per cent year-on-year volume growth.

These companies managed to maintain stronger demand compared to peers and continue to hold leadership positions in key markets.

Demand Outlook and Competition

On the demand outlook, Nuvama noted that October was slightly weak, but demand is expected to pick up meaningfully from November onward. With the GST cut already passed on to customers, prices in some regions may see marginal improvement.

The report also highlights increasing competition between UltraTech and Ambuja in certain markets, which could impact pricing trends going forward.

For FY26, Nuvama expects the cement industry to grow in mid-single digits, supported by strong government infrastructure spending, improving real estate activity and a low base effect from FY25.

Top Stock Picks and Expert Views

Nuvama’s top Buy-rated stocks are JK Cement, Ambuja Cement and ACC, reflecting their strong operational performance and stable demand outlook.

UltraTech Cement and Shree Cement are placed in the ‘Hold’ category, mainly due to valuations and competitive intensity.

Market expert Avinash Gorakshakar also shared his sector view, stating that UltraTech and Ambuja remain strong long-term picks due to their unmatched geographical reach.

He also sees value in Ramco Cement and Heidelberg Cement, especially for long-term investors, as capacity additions are slowing in the South.

He expects the second half of the year to be strong for cement companies as industry fundamentals remain positive.