The cement industry makes up one of the eight main sectors in the country. It has traditionally been a very important business for the government and it has achieved great progress after independence as a result of the continued expansion in various parts of the nation.
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Whether it be in an urban or rural location, each infrastructure plan, such as roads, railways, and residential, commercial, or industrial constructions, utilises cement. Also, the country’s cement sector has seen a huge volume increase as a result of numerous government initiatives.
In this article, we’ve examined the top 10 cement stocks in India and identified some of the country’s top cement producers that are seeing rapid growth. Continue reading to learn more about top cement stocks.
Indian Cement Stocks Industry
India’s demand for cement as well as other related materials is rising as it builds its infrastructure and sets the foundation for the future. This is because of its large population and rapid infrastructural growth. India ranks as the second-biggest cement producer in the world, producing 7% of the global cement capacity. Total Indian cement production capacity climbed to roughly 262 million tonnes during FY21, an increase of 7.8%. This growth is significant in light of the shrinkage of the manufacturing and building sectors even during the pandemic and ensuing lockdowns.
According to IBEF figures, this large increase is predicted to continue. By 2025, it is anticipated that cement consumption would reach 550–600 MT, mostly due to the tremendous demand for residential, commercial, and industrial growth. The Indian government’s efforts to enhance housing, notably PM Garib Kalyan Rojgar Abhiyan, MGNREGA, and state-level programs including public works projects and Matir Srisht, have also aided in lowering the need for housing.
Opportunities in Cement Stocks
India is the second-largest cement manufacturer in the world, accounting for around 7% of the global installed capacity. India produced around 390 million tonne of cement in FY23, a growth of 8-9%, according to different reports. Most research houses expect the growth rate to rise further to touch double digits in FY24. As many cement companies in India got listed on stock exchanges over the past few decades, they offer retail investor a direct chance to be part of this stellar growth opportunity.
Foreign direct investment in the cement industry hit $5.48 billion between April 2000 and June 2022. All this bodes well for the companies in the sector.
The Indian Cement Stocks Industry: A Synopsis
India’s need for Cement and other associated materials is expanding as it lays the groundwork for the future due to its population and extensive infrastructure development. India produces 7% of the world’s Cement capacity, making it the second-largest Cement manufacturer in the world.
In FY21, India’s total capacity for producing Cement increased by 7.8% to about 262 million tonnes. Given the contraction of the industrial and construction sectors during the COVID-19 epidemic and subsequent lockdowns, this increase is noteworthy.
IBEF statistics further state that this significant rise is expected to continue. Cement consumption is predicted to reach 550–600 MT by 2025, driven mainly by the enormous need for residential, commercial, and industrial development.
The demand for housing has also been helped by initiatives taken by the Indian government to improve housing, including MGNREGA, PM Garib Kalyan Rozgar Abhiyan, and state-level initiatives like Matir Srisht and public work projects.
These programs will work together to build a world-class, seamless multimodal transport network in India, which will also be advantageous for the Cement sector.
These figures show that the Cement industry will gain significantly from India’s fast-rising infrastructure needs. Demand will be considered as the nation is anticipated to create more than 100 smart city projects and related infrastructure projects over the next few years.
Best cement stocks listed on NSE
Based on the market cap
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | PE Ratio (%) |
| UltraTech Cement Ltd | 2,38,739.21 | 8,287.70 | 47.14 |
| Grasim Industries Ltd | 1,20,633.43 | 1,821.00 | 17.67 |
| Ambuja Cements Ltd | 91,647.46 | 460.90 | 35.48 |
| Shree Cement Ltd | 86,962.00 | 24,045.10 | 68.44 |
| ACC Ltd | 37,756.51 | 1,971.25 | 42.66 |
| Dalmia Bharat Ltd | 37,258.53 | 1,983.70 | 36.00 |
| J K Cement Ltd | 25,168.97 | 3,202.50 | 59.04 |
| Ramco Cements Ltd | 20,869.34 | 883.55 | 66.35 |
| RHI Magnesita India Ltd | 14,017.32 | 677.35 | -30.10 |
| Nuvoco Vistas Corporation Ltd | 12,887.98 | 362.10 | 812.61 |
Based on the net profit margin
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | PE Ratio (%) | Net Profit Margin (%) |
| Andhra Cements Ltd | 1,016.20 | 115.75 | 1.07 | 92.27 |
| Navkar Urbanstructure Ltd | 146.77 | 6.53 | 114.66 | 10.00 |
| Star Cement Ltd | 5,812.11 | 158.70 | 23.47 | 8.98 |
| Pokarna Ltd | 1,265.74 | 402.35 | 19.23 | 8.90 |
| Ramco Industries Ltd | 1,624.63 | 183.65 | 13.26 | 8.27 |
| UltraTech Cement Ltd | 2,38,739.21 | 8,287.70 | 47.14 | 7.94 |
| Shree Digvijay Cement Co Ltd | 1,238.17 | 87.15 | 21.32 | 7.92 |
| Dalmia Bharat Ltd | 37,258.53 | 1,983.70 | 36.00 | 7.57 |
| Shree Cement Ltd | 86,962.00 | 24,045.10 | 68.44 | 6.94 |
| Ambuja Cements Ltd | 91,647.46 | 460.90 | 35.48 | 6.51 |
Based on return on equity
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | PE Ratio (%) | Return on Equity (%) |
| Shri Keshav Cements and Infra Ltd | 219.46 | 133.15 | 75.42 | 53.01 |
| RHI Magnesita India Ltd | 14,017.32 | 677.35 | -30.10 | 29.33 |
| JK Lakshmi Cement Ltd | 7,322.02 | 636.45 | 20.42 | 19.98 |
| Pokarna Ltd | 1,265.74 | 402.35 | 19.23 | 19.37 |
| Keerthi Industries Ltd | 108.19 | 133.70 | -14.92 | 19.35 |
| Shree Digvijay Cement Co Ltd | 1,238.17 | 87.15 | 21.32 | 18.23 |
| Heidelbergcement India Ltd | 4,171.95 | 181.60 | 42.07 | 16.49 |
| SP Refractories Ltd | 14.32 | 80.00 | 23.47 | 15.09 |
| Deccan Cements Ltd | 674.25 | 478.35 | 13.68 | 14.47 |
| Ncl Industries Ltd | 872.99 | 194.60 | 19.72 | 13.43 |
Based on 5-yr CAGR
| Name | Market Cap (Rs. in cr.) | Close Price (Rs.) | PE Ratio (%) | 5Y CAGR (%) |
| Andhra Cements Ltd | 1,016.20 | 115.75 | 1.07 | 67.42 |
| J K Cement Ltd | 25,168.97 | 3,202.50 | 59.04 | 33.08 |
| Bheema Cements Ltd | 116.16 | 35.05 | -2.47 | 30.96 |
| RHI Magnesita India Ltd | 14,017.32 | 677.35 | -30.10 | 22.51 |
| Pokarna Ltd | 1,265.74 | 402.35 | 19.23 | 20.42 |
| Ambuja Cements Ltd | 91,647.46 | 460.90 | 35.48 | 15.04 |
| Shiva Cement Ltd | 955.31 | 48.10 | -11.87 | 15.01 |
| UltraTech Cement Ltd | 2,38,739.21 | 8,287.70 | 47.14 | 14.65 |
| JK Lakshmi Cement Ltd | 7,322.02 | 636.45 | 20.42 | 13.85 |
| India Cements Ltd | 6,780.55 | 215.15 | -53.44 | 12.95 |
Top Cement Stocks 2023
Now that we have a better understanding of this market, let’s examine the top 10 cement stocks in India.
1. UltraTech Cement Ltd: The main business of UltraTech Cement Ltd in India is the production and sale of cement and products that are directly connected to cement. Ultratech Cement has been the most profitable cement maker globally, the third-most-popular cement firm outside of China, as well as the most lucrative cement company in India.
2. Grasim Industries Ltd: Grasim Industries Ltd has its corporate office in Mumbai. With its subsidiaries, Grasim has grown into several businesses since its start as a textile company in 1947, notably in the cement and financial sectors. This business is regarded as another leading cement stock in India.
3. Ambuja Cements Ltd: With an operation in 80 different countries and specialising in producing cement, aggregate, and concrete, Ambuja Cements ranks as the most prosperous cement maker in India. It’s frequently referred to as India’s top cement.
4. Shree Cement Ltd: The company makes and distributes cement and products linked to cement and ranks as one of the country’s most reasonably priced cement makers. The two primary operations of this company are the manufacturing of cement and the selling of products related to cement. With such a 43.4 MTPA generation capacity, it’s indeed India’s third-largest cement producer.
5. ACC Ltd: Since its founding in 1936, ACC Limited has been an active member of the LafargeHolcim Corporation. The industry’s main goals are the production and selling of cement and prepared concrete. The company has factories all over India and sells the majority of its products in the domestic Indian market.
6. Dalmia Bharat Ltd: DBL, a famous cement business with a 35.9 MTPA output, was established in 1939 by Shri Jaidayal Dalmia. With a system of more than 32,000 distributors plus sub-dealers, the business now has 14 manufacturing operations that service customers in 22 states.
7. JK Cement Ltd: It is one of the largest cement manufacturers in North India. Being among the biggest manufacturers in the country, JK Cement has an estimated grey concrete capability of 14.7 million tonnes annually (MnTPA).
8. Ramco Cement Ltd: As a part of the Ramco Group with its base in Chennai, Ramco Cement Ltd produces Fiber Cement (FC) sheeting and Calcium Silicate Boards (CSBs). In addition to spinning cotton yarn as well as producing computer software, this company also sells additional energy generated by its windmills.
9. Nuvoco Vistas Limited: Nuvoco Vistas Ltd, a Nirma Group firm, is a significant construction material manufacturer in India. It began operations in India via acquisitions in 1999 and has since risen as one of the country’s key businesses. With the purchase of Nu Vista Ltd, Nuvoco is one of the top cement makers in India and the dominant player, delivering high-performing, premium, blended cement variations.
10. RHI Magnesita India Ltd: Previously known as Orient Refractories Ltd, it is one of the top producers of refractory materials in India. Refractories are primarily produced by the firm for the steel industry. Both in India and internationally, ORL products are sold. It provides a wide range of unusual refractories. Customers are served by three state-of-the-art production facilities that are situated in Andhra Pradesh, Rajasthan, and Odisha.
Factors to consider before investing in cement stocks
Market diversification – In India, disparity in regional growth can mean a spoke in the wheel for a cement company that concentrates on only one sector. Of course, it can be other way around also and the region with strong presence is doing well. It is important for a cement company to have larger presence in India and may be even abroad.
Mining rights – A greater access to limestone quarry helps a cement company cut cost and increase production without being dependent on others for supply of raw material.
Consolidation – Cement companies in India are going through a phase of consolidation. A better company would be one with deep pockets to ward off threats of acquisition and have power to buy new plants.
Financials – An investor should do a deep study of finances of the company, its debt levels, its revenue and profit performance over the past few years, before deciding to invest.
Valuation – A cement company that is valued less than peers despite good operations may present a good opportunity to invest.
Cement is a critical component of the construction sector, providing the building blocks for everything from homes and commercial buildings to infrastructure projects such as roads, bridges, and dams. The cement industry is one of India’s important industries, contributing 7% of the world’s cement capacity.
Growth of the Indian cement industry
When you look at the Indian cement industry’s place in the world, our country stands as 2nd largest cement producer globally and also 3rd largest consumer. During the COVID-19 pandemic, the cement sector was one of the sectors that got affected due to reduced construction activities.
However, in 2021 the demand and supply got picked up. In the Union Budget 2023, Finance Minister Nirmala Sitharaman announced a 33% increase in capital investment outlay to Rs. 10 lakh cr. After the announcement, cement sector stocks were positively impacted, and companies like Ultratech Cement were positioned as one of the top buys. In India, cement consumption is expected to reach 550–600 MT by 2025, driven mainly by the massive need for commercial, industrial and residential development.
Is it worth investing in the cement industry stocks?
With the increase in population, the demand for housing, commercial and industrial buildings keeps increasing. Even the Government of India has several developments planned concerning infrastructure and housing projects like PM Awas Yojana. This shows that the demand for cement is never-ending. However, as an investor, you should not just look at the industry’s growth but also the company’s growth along with your investment objective and risk appetite.
Factors to consider while investing in cement stocks
Though the cement sector is one of the essential sectors in India, there are certain things you need to consider while investing,
- Economic and political stability in the country.
- The competitive landscape of the industry, including the market share and pricing power of major players.
- Raw material availability and cost.
- The regulatory environment, including environmental regulations and labour laws.
- The financial health and management of individual companies.
When you check all these factors, you clearly understand if the stock is worth investing in.
Conclusion
Cement stocks present an opportunity to be a part of India’s infrastructure play as these stocks are set to do well with Indian economy on a strong footing and government focus on improving real estate, roads, ports and construction sectors. It is important to research stocks individually before any decision to invest and understand their technical metrics and fundamentals.
