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UBS has upgraded its ratings on domestic cement stocks, raising Dalmia from 'Sell' to 'Buy' and maintaining 'Buy' on ACC, citing strong earnings growth expected between FY25 and FY27. The firm also upgraded UltraTech Cement and Ambuja Cement, with price targets indicating potential upsides of 14-20%. Despite a previous negative outlook due to competition and demand slowdown, analysts now anticipate an earnings upcycle starting in FY26.
Ultratech Cement's share price rose by 3.20% following an upgrade to 'buy' by UBS, which also raised target prices for several cement stocks. The brokerage anticipates increased market share for top manufacturers and expects demand to rise due to housing and government spending. Despite a 17% decline in net profit year-on-year, the outlook for the sector remains positive amid ongoing consolidation.
Indian cement stocks, including UltraTech Cement, Dalmia Bharat, and Adani's Ambuja and ACC, have risen by 1.5%-3% following UBS's upgrade of their ratings, signaling an end to the sector's rough patch. UBS anticipates a demand rebound in FY26 driven by increased government spending, housing upcycle, and improved rural conditions, projecting core profit growth of 18%-43% from FY2025-27. While ACC has seen a ~5% decline year-to-date, the other three companies remain stable, with market leaders expected to benefit from ongoing sector consolidation.
UBS has upgraded UltraTech Cement, Ambuja Cements, and Dalmia Bharat to "buy," citing a rebound in demand after a challenging fiscal year 2025. The firm raised UltraTech's price target to 13,000 rupees and forecasts an 18%-43% core profit CAGR for these companies from FY2025-27, driven by increased government spending and a housing upcycle. Despite recent share declines, market leaders are expected to benefit from ongoing sector consolidation.
Narayana Hrudayalaya, Aegis Logistics, AGS Transact Tech, and Tata Investment are among the key stocks to watch on Muhurat Trading Day. Other notable mentions include Alembic Pharmaceuticals, Dalmia Bharat, and Electronics Mart India. Additionally, Bondada Engineering, Challani Capital, Lykis, and Nutraplus India are set to release their quarterly earnings today.
Dalmia Bharat's 2QFY25 results showed a 26% YoY decline in EBITDA to INR 4.3 billion, with a 54% drop in PAT to INR 550 million. Despite weak performance, management anticipates an 8% YoY demand growth in 2H, driven by construction and infrastructure projects. The stock, down 25% since December 2023, is valued at a revised target price of INR 2,250, maintaining a BUY rating.
Dalmia Bharat's Q2 results showed an 8% year-on-year volume increase, but margins were impacted by a 5-7% decline in cement prices during the monsoon season. Despite muted near-term growth prospects, the company aims for a 75MT capacity by FY28, supported by improved realisations and stable power and fuel prices.
Dalmia Bharat Limited
Companies
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
brokerage upgrades cement stocks amid anticipated earnings growth and industry tailwinds
United States Dollar
UltraTech Cement Limited
AMBUJA CEMENTS LTD
Dalmia Bharat Limited
IND
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01:44 26.03.2025
Ultratech Cement shares rise after UBS upgrade to buy rating
06:48 25.03.2025
Indian cement stocks rise as UBS predicts sector recovery and upgrades ratings
United States Dollar
UltraTech Cement Limited
AMBUJA CEMENTS LTD
Dalmia Bharat Limited
IND
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05:16 25.03.2025
ubs upgrades cement stocks as demand rebounds in india
04:33 25.03.2025
Stocks to watch on Muhurat Trading Day including Narayana Hrudayalaya and Aegis
Genesys International Corporation Limited
Tata Investment Corporation Limited
Tilaknagar Industries Ltd.
Dalmia Bharat Limited
Narayana Hrudayalaya Limited
Electronics Mart India Limited
AEGIS LOGISTICS LIMITED
AGS Transact Technologies Limited
Tierra Agrotech Ltd.
Alembic Pharmaceuticals Limited
IND
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21:27 31.10.2024
Dalmia Bharat faces challenges but maintains buy rating with revised target price
12:49 24.10.2024
Dalmia Bharat reports volume growth amid challenging pricing environment in Q2
04:38 23.10.2024
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