Nomura expects strong volume growth to aid cement margins; Upgrades UltraTech, Ramco
Nomura believes that the momentum in cement stocks is likely to continue with margins expanding on the back of stronger volume growth, pricing discipline and relatively lower fuel costs.
Brokerage firm Nomura has upgraded cement stocks UltraTech Cement, Dalmia Bharat and Ramco Cements, along with raising their respective price targets as well.
The brokerage has upgraded these stocks to "buy" from the earlier rating of "neutral." Additionally, it has also increased the price target on Shree Cements, while maintaining its "buy" recommendation.
Nomura believes that the momentum in cement stocks is likely to continue with margins expanding on the back of stronger volume growth, pricing discipline and relatively lower fuel costs.
The brokerage also expects strong sales volume growth to continue in the second half of the current financial year. Volume growth over financial year 2025-2026 is likely to be higher than that in the past decade, Nomura said.
Trade prices are also likely to improve as the industry exits a pre-election phase with a recent industry survey suggesting a bright outlook, the brokerage said.
Shares of UltraTech Cement are trading at a record high of ₹10,300, having gained 2.8%. The stock is closing in on the ₹3 lakh crore market capitalisation mark.
Shares of Ramco Cement are also trading 2.2% higher at ₹1,010, while those of Dalmia Bharat are also trading 3% higher at ₹2,309.
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