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Business Standard

Cement shares in focus; Sagar, Dalmia Bharat, JK Cement hit 52-week highs

Cement companies share price today Shares of select cement companies were in focus, and rallied up to 7 per cent on the BSE in Friday's intra-day trade amid heavy volumes on expectations of a healthy demand outlook. Sagar Cements (up 7 per cent at ₹274), JK Cement (4 per cent at ₹6,668) and Dalmia Bharat (3 per cent at ₹2,255) hit their respective 52-week highs on the BSE in intra-day trade. In comparison, the BSE Sensex was down 0.62 per cent at 81,753 at 03:03 PM. Cement sector overview The Indian Government announced a series of measures in the Union Budget for FY2025-26 (FY26), which would boost cement demand substantially. The cement industry faced multiple challenges during FY25, including slower growth and lower sales. Growth slowed to 4-5 per cent, down from double-digit growth in previous years. This was partly due to elections and a long monsoon season, as well as labour shortages. However, the medium-to long-term outlook remains positive, with various industry reports pegging the sector growth at 7-8 per cent per annum, at par with the GDP growth, Sagar Cements said in the FY25 annual report. The infrastructure segment continues to see strong demand, driven by increased government spending across various infrastructure segments. Housing, which accounts for 55 per cent of cement demand, is expected to grow steadily, supported by rural housing expansion, due to favourable monsoons, moderating inflation and ongoing urban real estate projects. The government's emphasis on affordable housing and investments in mega projects such as highways, railways and industrial development is expected to further sustain cement demand. Most brokerage reports indicate that pent-up demand, a renewed capex push, and sustained momentum in the housing sector are going to drive up demand. Meanwhile, the lower interest rates are expected to encourage higher spending and investment, stimulating economic activity and supporting overall economic growth. Further, the new tax structure will substantially reduce taxes for the middle class and leave more money in their hands, boosting household consumption, savings and investment, which is expected to work in favour of the cement sector. Brokerages view on cement sector On the demand front, it remained better due to a lower base of the previous year. The demand from government infrastructure projects is yet to pick up in some key states, as per experts. With the onset of the monsoon season, demand softened further in most pockets. The density of the rainfall in September-October 2025 and revival of demand post- monsoon to decide the pricing direction, with most capacities in FY26F to come on stream in the second half of the year, analysts at InCred Equities said in sector report. In the short term, the sector will likely face seasonal challenges due to Monsoon-related weakness, affecting demand and pricing. However, we expect demand growth to rebound in FY26, driven by improved execution of government initiatives, such as the Pradhan Mantri Awaas Yojana – Gramin, and increased irrigation spending. Capacity addition will continue, keeping utilization range-bound. As the industry enters a lean season, profit margin may see a near-term peak in Q1FY26. Investors may consider reducing their positions after Q1FY26 results to avoid short-term underperformance, said analysts at Elara Capital.