UltraTech, Birla Corp, JK Lakshmi among Nirmal Bang's top picks in cement sector

“In the midcap space, we like Birla Corporation, JK Lakshmi Cement and Nuvoco and Sagar Cements in the smallcap space,” he said.

Jefferies has put the spotlight on the cement sector in its recent note. It believes that the cement industry, on the whole, is moving from a desperate seller market to an aggressive buyer market. So possibly various mergers and acquisitions could take place as companies look to scale up from here.

According to Bhadang, historically, there has been a lot of talks of consolidation in the cement industry for the past many years but nothing much has happened meaningfully.

“I don’t see a large-scale consolidation happening in the industry for sure. We would still have regional as well as smaller players operating in each region,” he said.

The channel-checks are suggesting that the east region along with the central region would grow the highest over the next two years.

“We have seen eastern region demand faltering over the past couple of years. Over the next two years, these two regions can grow in double-digits and that is what is driving this growth higher,” he explained.

He is looking at some of the best players in the east region like Nuvoco, JK Lakshmi and Birla Corporation to ride this growth.

Bhadang prefers ACC over Ambuja Cements. “Adani Group has a lot to do, they would be merging these two companies together and then they would lay out the plan in terms of what they want to do in terms of capacities or efficiencies in future. I would still wait for some clarity on this. We would take a call post the board meeting,” he explained.