6 days ago
CLSA Favors Three Cement Stocks, Flags Ramco Risks
CLSA studied several cement companies and chose three as its favorites.
They are Shree Cement, Dalmia Bharat and UltraTech Cement.
CLSA thinks these companies can grow because they are adding production capacity and may manage costs well.
Shree Cement has the highest expected gain among the four companies discussed.
Dalmia Bharat is expanding quickly and wants much more capacity by 2030.
UltraTech is viewed as the strongest large cement company because of its size, market position and regional reach.
CLSA is less optimistic about Ramco Cements because it has less new capacity and is concentrated in fewer regions.
Cement demand is still growing, but higher fuel costs and weaker volumes may hurt profits in the second quarter.
CLSA named Shree Cement, Dalmia Bharat and UltraTech Cement its preferred cement stocks.
Shree Cement received a Rs 30,500 target price and the highest potential upside at 26.6%.
Dalmia Bharat and UltraTech Cement received target prices of Rs 2,250 and Rs 14,000, with upsides of 21.9% and 21.3%.
CLSA expects second-quarter profitability pressure from higher fuel costs, weaker volumes and negative operating leverage.
Ramco Cements was rated Underperform with a Rs 750 target price and estimated downside of 17.1%.
- Who
- CLSA and the cement companies Shree Cement, Dalmia Bharat, UltraTech Cement and Ramco Cements.
- What
- CLSA updated its cement-sector stock views, favoring three companies and rating Ramco Cements Underperform.
- Where
- The assessment covers India’s cement sector, with regional references including eastern, central, western and northern India.
- When
- The CLSA report was dated August 25, 2026; its sector observations cover the current period and upcoming second quarter.
- Why
- CLSA cited resilient demand, capacity expansion, cost performance and earnings visibility for its preferred stocks, while citing Ramco’s limited capacity additions and concentrated presence as concerns.
CLSA’s Preferred Stocks
CLSA’s Cautious View on Ramco
Growth prospects
CLSA’s Preferred Stocks
CLSA expects Shree Cement, Dalmia Bharat and UltraTech Cement to benefit from capacity additions and stronger-than-industry or industry-leading volume growth.
CLSA’s Cautious View on Ramco
CLSA expects Ramco Cements’ volume growth to lag industry peers because of lower capacity additions and concentrated regional presence.
Profitability
CLSA’s Preferred Stocks
Premiumisation at Shree, cost leadership at Dalmia and pricing, cost savings and renewable capacity at UltraTech could support profitability.
CLSA’s Cautious View on Ramco
Ramco could benefit if industry spreads improve, utilisation rises and costs decline, but its rating reflects limited growth visibility and geographical concentration.
Investment stance
CLSA’s Preferred Stocks
CLSA rated Shree Cement and Dalmia Bharat Outperform and UltraTech Cement High-Conviction Outperform.
CLSA’s Cautious View on Ramco
CLSA rated Ramco Cements Underperform and lowered its target price from Rs 755 to Rs 750.
Key facts
- Preferred stocks
- Shree Cement, Dalmia Bharat and UltraTech Cement
- Highest upside
- Shree Cement: 26.6% based on a Rs 30,500 target price
- Dalmia Bharat view
- Outperform; Rs 2,250 target price; 21.9% potential upside
- UltraTech Cement view
- High-Conviction Outperform; Rs 14,000 target price; 21.3% potential upside
- Ramco Cements view
- Underperform; Rs 750 target price; 17.1% potential downside
- Demand trend
- CLSA channel checks indicated 6%-8% growth across most regions
- Near-term outlook
- Second-quarter profitability may face pressure from higher fuel costs and weaker volumes
- Later outlook
- Profitability could improve in the second half if competition eases and fuel costs remain benign
Quotes
CLSA
Brokerage issuing the cement sector report
“Our target price is based on 16.0x FY28CL EV/Ebitda, largely in line with large-cap peers like UltraTech and Ambuja”
financialexpress.com
“We believe UltraTech is best positioned among the large-cap cement companies”
financialexpress.com
Sources
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