5 Cement Stocks Riding the Growth Wave

Cement stocks have had a quiet but steady run over the past year.

While broader markets chased flashy narratives, this old-economy sector focused on execution, capacity and margin discipline.

The result?

Many cement companies now stand on stronger footing, backed by expanding capacity, falling input costs and improving sales realisations.

Investors eyeing long-term plays would do well to look at companies building capacity smartly and protecting their profitability.

In this editorial, we spotlight five such names.

#1 Shree Cement

First on our list is the Shree Cement.

Shree Cement is expanding fast, but not at the cost of profitability.

Its current cement capacity stands at 62.8 million (m) tonnes, supported by 36.7 m tonnes of clinker. The company plans to reach 80 m tonnes by FY28, adding scale without stretching its balance sheet.

In Q4 FY25, Shree Cement reported a 13% jump in volumes to 9.84 m tonnes. Realisations improved to Rs 4,768 per tonne.

Operating profit shot up 47% sequentially. Profit per tonne stood at Rs 1,406 and adjusted for one-time costs, the figure was Rs 1,437.

The company has commissioned 6.4 m tonnes of new capacity at Etah and Baloda Bazar. By end FY26, Kodla and Ras Jaitaran units will take the capacity to 68.8 m tonnes.

Capital spending for FY26 is pegged at Rs 30 billion (bn), fully funded from internal accruals. Net cash stood at Rs 54 bn in March.

To know more about the company, check out its financial factsheet and latest quarterly results.

#2 Ramco Cements

Next on our list is Ramco Cements.

Ramco Cements has been quietly reshaping its portfolio. While volumes stayed flat in FY25, the company has laid the groundwork for a more profitable and diversified future.

Cement sales in FY25 stood at 18.5 m tonnes, up just 1%. Realisations fell 10% year on year (YoY), dragging full year revenue to Rs 85.4 bn, down from Rs 93.9 bn. EBITDA dropped 20%, though reported profit was aided by Rs 3.4 bn from sale of non-core assets.

Operating leverage improved as energy and freight costs softened. EBITDA per tonne for the March quarter stood at Rs 631.

Going forward, the company is pressing ahead with expansion plans. Cement capacity is expected to reach 30 m tonnes by March 2026. A new railway siding at Kolimigundla and two waste heat recovery units will improve cost efficiency.

FY26 capex is pegged at Rs 12 bn, funded partly through internal accruals and asset sales.

Premium products formed 27% of volumes in the south and 23% in the east. Construction chemicals continue to scale up, with a new Odisha unit expected by mid-2025.

The business has taken a knock from weak prices, but the cost structure is improving.

To know more about the company, check out its financial factsheet and latest quarterly results.

#3 UltraTech Cement

Third on our list is UltraTech Cement.

UltraTech Cement, India's largest player, is operating at a domestic capacity of 183.4 m tonnes. Two big acquisitions, India Cements and Kesoram, have added scale, pushing consolidated volumes for FY25 to 135.8 m tonnes, up 14% YoY.

The March quarter was strong. Grey cement domestic volumes rose 10%, and EBITDA per tonne improved to Rs 1,270, up 6% from last year. The cost efficiency gains supported margins.

Premium products now make up 31% of volumes and the ready mix concrete business is growing rapidly.

Capacity is set to reach 210.5 m tonnes by FY27. Capex for FY26 is guided at Rs 100 bn. Net debt stood at Rs 17.7 bn in March 2025. The management expects to bring it down as cash flows improve.

India Cements and Kesoram will undergo full integration and rebranding over the next two years. These assets are expected to cross Rs 1,000 per tonne EBITDA by FY28.

To know more about the company, check out its financial factsheet and latest quarterly results.

#4 Shree Digvijay Cement

Fourth on our list is Shree Digvijay Cement.

Shree Digvijay Cement is a small-cap cement stock with big ambitions. The company manufactures and sells cement under the 'Kamal' brand, including Portland pozzolana, OPC, SRPC, and oil well cement.

It operates at a capacity of 1.5 m tonnes, recently expanded from 1.2 m tonnes, which helped improve realisations and cost absorption.

Over the past five years, revenue has grown at a CAGR of 12.7%, while net profit has compounded at 111.8%. This has translated into strong return ratios. The average RoE stood at 19.4% and the average RoCE was 27.8%.

FY25 was a mixed year as revenue declined and EBITDA dropped by half. But the March quarter some showed signs of recovery. Quarterly volumes rose 10% sequentially, and EBITDA per tonne improved to Rs 837, up from just Rs 40 in the previous quarter.

The company is debt free and has consistently rewarded shareholders. It has a three-year average dividend payout of 80.7% and a dividend yield of 3.2%. For FY25, it declared a dividend of Rs 1.5 per share.

Growth visibility looks strong as the company is undertaking brownfield expansion to add 3 m tonnes of grinding capacity, doubling its base.

This project is estimated to cost Rs 2.5 bn, to be funded through a 50-50 mix of debt and internal accruals. Commercial operations are expected to begin in Q4 FY26.

To know more about the company, check out its financial factsheet and latest quarterly results.

#5 JK Cement

Last on the list is JK Cement.

The company closed FY25 at a capacity of 24.3 m tonnes of grey cement and 1.7 m tonnes of white cement and putty. By FY26, total capacity is expected to hit 30 m tonnes, backed by projects in Panna, Hamirpur, Prayagraj, and Bihar.

In FY25, JK Cement's revenue rose 1%, while EBITDA dipped 1%. Profit after tax grew 5%, but EBITDA per tonne declined 6.4%, reflecting cost pressures earlier in the year. Margins remained steady at 18.5%.

The company is holding steady on balance sheet strength. Net debt to equity stands at 0.42, and net debt to EBITDA at 1.13 times.

FY26 capex is between Rs 18 to 20 bn and is entirely earmarked for expansion.

JK Cement is also actively diversifying. The white cement and wall putty business now contributes 1.72 m tonnes, while premium products account for 15% of grey trade sales.

To know more about the company, check out its financial factsheet and latest quarterly results.

Conclusion

As the cement sector builds for the future, investors must build their expectations carefully.

A surge in planned capacity, softening input costs and efficiency gains paint a promising picture. But in a business where returns come in cycles, momentum can fade as fast as it builds up.

Capital is being deployed aggressively, yet past cycles remind us that expansion alone does not ensure value creation.

Valuations in parts of the sector have already priced in the next phase of growth. That leaves little room for missteps.

Investors would do well to dig beyond earnings estimates and focus on balance sheet strength, return ratios, and the ability to convert capacity into cash flows.

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