7 months ago
HSBC Predicts Cement Sector Recovery in 2026
HSBC, a big investment company, thinks the Indian cement industry will do better in early 2026.
They say prices will go up, especially in the East and South regions.
HSBC likes three big cement companies: UltraTech, Ambuja, and Dalmia Bharat.
They think these companies will do well because they are big and can handle higher costs.
HSBC also says that two other companies, Shree Cements and ACC, might not do as well because of high prices and other problems.
They believe the cement industry will get stronger because the biggest companies are getting even bigger, which helps them control prices better.
HSBC predicts a recovery in the Indian cement sector with price hikes expected in early 2026.
UltraTech Cement, Ambuja Cements, and Dalmia Bharat are HSBC's top picks with significant upside potential.
Shree Cements and ACC receive a Hold rating due to valuation concerns and post-merger impacts.
East and South India are identified as key regions for recovery due to significant price drops in 2025.
Expected demand growth of 5-6% in 2026 is anticipated to offset higher costs and drive operational leverage.
- Who
- HSBC, UltraTech Cement, Ambuja Cements, Dalmia Bharat, Shree Cements, ACC
- What
- HSBC predicts a recovery in the Indian cement sector with price hikes expected in early 2026
- Where
- East and South India identified as key regions for recovery
- When
- Price hikes expected between January and March 2026
- Why
- Consolidation among top players and expected demand growth of 5-6%
Key facts
- UltraTech Cement
- Target price: Rs 14,900, 25.2% upside
- Ambuja Cements
- Target price: Rs 720, 27.3% upside
- Dalmia Bharat
- Target price: Rs 2,740, 27.6% upside
- Shree Cements
- Hold rating, 17.3x FY27e EV/EBITDA
- ACC
- Hold rating, post-merger impact
- Expected Demand Growth
- 5-6% in 2026
- Key Regions for Recovery
- East and South India
- Capacity Addition
- 100MT over FY26–27
Quotes
HSBC
Global investment banking and brokerage firm
“We maintain our Hold rating as we believe the stock’s current expensive valuations (17.3x FY27e EV/EBITDA) will limit further upside from here. Moreover, we expect the North to lead the industry’s next capacity addition cycle, where SRCM’s exposure is the highest.”
financialexpress.com
“a large part of the capacity addition will only ramp up from 2HFY27, and that the actual impact is likely to be back-ended in CY26, which should allow cement price hikes to flow through in 1H26.”
financialexpress.com
