Goldman Sachs has issued a mixed outlook on the cement sector, with profitability in FY25 expected to be among the weakest in recent years. The brokerage highlighted significant differences in performance expectations across companies, providing the following ratings:
- Ultratech Cement: Buy – Maintains a positive outlook, citing market leadership, consolidation of capacity, and premium valuation sustainability.
- Shree Cement, Dalmia Bharat, Ambuja Cement: Neutral – Indicates cautious optimism with limited upside potential.
- ACC: Sell – Projects challenges due to weaker profitability metrics compared to peers.
Sector insights:
Goldman Sachs predicts that FY25 will be one of the weakest years for cement sector profitability due to elevated input costs and slower demand recovery. However, the brokerage expects a moderate improvement in FY26, as consolidation of market share, capacity expansion, and resource optimization by larger players like Ultratech Cement will sustain their premium valuations.
Investors are advised to monitor capacity expansion plans, cost structures, and demand recovery trends for key players in the cement sector.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.