Cement stocks on a strong footing in FY26; GST cut could cement further gains
GST Rate Cut Could Be a Game-Changer
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Cement Sector June '25 Quarter Results: Profit Surges Despite Modest Revenue Growth
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Cement stocks have started FY26 on a strong footing, with many names posting impressive double-digit price gains. Leading the charge is Nuvoco Vistas, which has soared 47%, followed by JK Cement with a 42% rise, and Star Cement up 34%. India Cements and Dalmia Bharat have also rallied, gaining 33% and 25%, respectively—signaling solid investor confidence in the sector.The ongoing rally is being fueled by rising optimism around a potential GST cut on cement , which could significantly boost sector fundamentals. During his Independence Day address on August 15, Prime Minister Narendra Modi hinted at 'next-generation GST reforms' to be introduced before Diwali, aimed at easing tax pressures. A long-awaited reduction in the GST rate on cement from 28% to 18% could serve as a key trigger for the industry.Looking at FY26 stock performance so far, large-cap cement stocks have shown relatively muted gains—Ultratech and Ambuja are up 7%, Shree Cement is flat, while ACC Ltd . is down 8%, according to ACE Equity data."A possible reduction in GST on cement from 28% to 18%—a long-standing demand of the industry—could serve as a significant growth catalyst for the sector. As per Jefferies, such a move could cost the government Rs 200–250 billion in revenue but would significantly improve affordability and demand across the cement value chain.Brokerage firm Motilal Oswal labeled the proposed cut a 'key sentiment positive,' estimating it could reduce cement prices by 7.5–8%. This would boost demand, improve utilization rates for cement companies, and strengthen profit margins. Motilal specifically highlighted Ultratech Cement and JK Cement as likely top beneficiaries due to their scale and operational efficiency.For real estate developers, a GST cut could bring direct cost benefits. With cement accounting for 4–5% of home prices in top cities, developers could see 40–50 basis points margin expansion, making housing projects more financially attractive.The June '25 quarter proved to be a profitable one for many cement companies, with strong earnings growth outpacing revenue gains—pointing to improving margins, cost control, and operational efficiency.Nuvoco Vistas Corporation stole the show with a staggering 4,589% YoY jump in PAT, reaching Rs 133 crore. Star Cement recorded 217% spike in profit, showing robust performance on bottom lines. Ambuja Cements impressed with 22.6% sales growth and a solid 24% profit growth, indicating healthy volume and pricing trends.JK Cement maintained strong form with 19.4% sales growth and 75% PAT growth. Ultratech Cement, the industry leader, clocked the highest revenue at Rs 21,275 crore, with 13% sales growth and a 49% rise in PAT to Rs 2,225 crore.
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