Cement stocks are once again on Dalal Street investors’ radars with the monsoon season expected to get over the next 2-3 weeks and peak construction activity expected to restart in most parts of the country.
Also, with the government recently announcing that GST on cement industry would shortly fall to 18% from 28%, and lower prices of this input is expected to help boost demand from key user industries like construction and infrastructure sectors.
And with the RBI also taking several steps over the past few months to reduce interest rates on loans and boost lending in the broader banking, this is also expected to help improve demand for cement over the next few quarters.
It’s no surprise that cement stocks have done well on the bourses – Mumbai-based UltraTech Cement, the largest domestic cement player with an all-India presence, ended 0.6 % higher on Monday at Rs 12,661, and not too far from its 52-week high of Rs 13,101 that was reached on 4 September 2025.
Other leading players like New-Delhi based JK Lakshmi Cement, with a presence in northern, western and eastern regions, ended 0.4 % lower on Monday at Rs 924.5, and not too far from its 52-week high of Rs 1,020.85 that was reached on 22 July 2025.
Even Chennai-based The Ramco Cements with a strong focus on southern states, ended down nearly 2% on Monday at Rs 1,049, and not too far from its 52-week high of Rs 1,206.6 that was reached on 31 July 2025.
The Valuation Question: A Look at the Leaders
UltraTech Cement had a capacity of nearly 192.26 million tonnes at the end of the June 2025 quarter. On a valuation metric, enterprise value per tonne, the stock trades at nearly $ 220 per tonne.
The Ramco Cements with a capacity of nearly 24 million tonnes at the end of FY 25, trades on a enterprise value / tonne valuation metric of nearly $ 139 per tonne.
And JK Lakshmi Cement with a capacity of nearly 16.4 million tonnes at the end of FY25, trades at enterprise value / tonne valuation metric of nearly $ 85 per tonne.
Is the Good News Already Priced In?
The cement sector is expected to do much better in the second half of the current financial year, which is typically the peak season of construction and allied activities in most parts of the country.
UltraTech Cement trades at a P/E of more than 40 times estimated standalone FY26 earnings.
Meanwhile, The Ramco Cements trades at a P/E of more than 50 times estimated standalone FY 26 earnings. And JK Lakshmi Cement trades at a P/E of about 20 times estimated standalone FY26 earnings.
Clearly, cement stocks are quite expensive and Dalal Street appears to have already factored in the growth opportunities for players in this sector over the next few quarters.
Disclaimer
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family have no shareholding in any of the stocks mentioned in the article.
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