Indian cement makers to perform slightly better in FY26, Goldman Sachs says

ACC

04/12/2024 07:44

** Goldman Sachs says fiscal year 2026 will only be "slightly
better" for Indian cement firms after calling FY25 as "one of
the weakest years for the cement sector's profitability"
    ** Brokerage says continuing capacity ramp-up, dealmaking
are expected to keep market share fight intact; profitability
improvement in check 
    ** But expects cement demand growth to rise to ~7% in FY26,
from 4.5% in FY25 
    ** "Consolidators ... relatively better positioned near-term
than mid-sized names (who are neither acquirers nor acquisition
targets)" - note   
    ** Brokerage's calls:
 Co name     RIC        GS' rating  Mean rating
                                    per LSEG data
 UltraTech    ULTC.NS   buy         buy
 Cement                             
 Shree        SHCM.NS   neutral     hold
 Cement                             
 Dalmia       DALB.NS   neutral     hold
 Bharat                             
 Ambuja       ABUJ.NS   neutral     buy
 Cements                            
 ACC          ACC.NS    sell        buy
 
    ** Out of the aforementioned, only SHCM trading higher on
the day with 1% gains 
    ** Out of the listed names in the table on a YTD basis: ULTC
best performer with 13% gains; DALB worst performer with ~16%
decline 

 (Reporting by Hritam Mukherjee in Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com;))