Axis Direct picks UltraTech, Ambuja, Dalmia & JK Lakshmi as top cement stocks
According to Axis Direct, the sector’s performance in Q2FY26 was driven by a 16 per cent rise in volumes and a 4.5 per cent improvement in realisations, which helped expand EBITDA margins.
- Nov 12, 2025,
- Updated Nov 12, 2025 12:07 PM IST
Brokerage firm Axis Direct, the retail broking arm of Axis Securities, has turned positive on India’s cement sector, citing a strong second-quarter performance and an upbeat demand outlook. In its latest report, the brokerage said companies under its coverage delivered robust year-on-year growth, surpassing estimates across key parameters such as volumes, revenue, EBITDA, and profitability.
According to Axis Direct, the sector’s performance in Q2FY26 was driven by a 16 per cent rise in volumes and a 4.5 per cent improvement in realisations, which helped expand EBITDA margins. Despite a sequential dip due to seasonality, the brokerage noted that EBITDA per tonne surged 50 per cent year-on-year to Rs 930.
Looking ahead, Axis Direct expects the industry to maintain momentum, projecting high single-digit volume growth in FY26 and a 7–8 per cent CAGR over FY24–27E. The positive outlook is underpinned by continued government infrastructure push, a revival in housing demand, and improving rural consumption trends. The brokerage also termed the recent GST rate cut as a structural tailwind likely to lift medium-term demand.
Axis Direct has identified four top picks from the cement space — UltraTech Cement, Ambuja Cements, Dalmia Bharat, and JK Lakshmi Cement — as its “conviction ideas.”
UltraTech Cement (Buy | Target Price: Rs 13,900)
As the industry leader, UltraTech is seen as a key beneficiary of consolidation within the sector. The company’s aggressive capacity expansion plan — targeting 235 mtpa by FY28-29 — and its goal to lift market share from 25 per cent to 28 per cent are central to Axis Direct’s positive stance. The brokerage projects a 14 per cent volume CAGR over FY25–27E, supported by cost-reduction initiatives of Rs 200–300 per tonne.
Ambuja Cements (Buy | Target Price: Rs 705)
Ambuja is undergoing a major expansion, targeting a capacity of 155 mtpa by FY28, up from its earlier 140 mtpa goal. Axis expects a 12 per cent CAGR in both volume and revenue over FY24–27E, backed by the company’s sharp focus on efficiency and cost optimization. Ambuja aims to reduce production costs to Rs 4,000 per tonne by FY26.
Dalmia Bharat (Buy | Target Price: Rs 2,550)
Axis Direct expects Dalmia Bharat’s growth to be supported by its ongoing expansion projects and steady cost-saving efforts. The brokerage projects a 7 per cent volume CAGR, with EBITDA margins expected to remain strong at 21–22 per cent over FY26–27E. The company is targeting cost savings of Rs 150–200 per tonne over the next two years.
JK Lakshmi Cement (Buy | Target Price: Rs 1,030)
JK Lakshmi Cement outperformed the sector in Q2FY26, posting a 15 per cent year-on-year growth in sales volume. The company plans capacity additions of 4.6 mtpa in grinding and 2.3 mtpa in clinker by FY27–FY28. Axis expects an 18 per cent CAGR in EBITDA per tonne over FY25–27E, supported by cost efficiencies and strategic growth initiatives.
Brokerage firm Axis Direct, the retail broking arm of Axis Securities, has turned positive on India’s cement sector, citing a strong second-quarter performance and an upbeat demand outlook. In its latest report, the brokerage said companies under its coverage delivered robust year-on-year growth, surpassing estimates across key parameters such as volumes, revenue, EBITDA, and profitability.
According to Axis Direct, the sector’s performance in Q2FY26 was driven by a 16 per cent rise in volumes and a 4.5 per cent improvement in realisations, which helped expand EBITDA margins. Despite a sequential dip due to seasonality, the brokerage noted that EBITDA per tonne surged 50 per cent year-on-year to Rs 930.
Looking ahead, Axis Direct expects the industry to maintain momentum, projecting high single-digit volume growth in FY26 and a 7–8 per cent CAGR over FY24–27E. The positive outlook is underpinned by continued government infrastructure push, a revival in housing demand, and improving rural consumption trends. The brokerage also termed the recent GST rate cut as a structural tailwind likely to lift medium-term demand.
Axis Direct has identified four top picks from the cement space — UltraTech Cement, Ambuja Cements, Dalmia Bharat, and JK Lakshmi Cement — as its “conviction ideas.”
UltraTech Cement (Buy | Target Price: Rs 13,900)
As the industry leader, UltraTech is seen as a key beneficiary of consolidation within the sector. The company’s aggressive capacity expansion plan — targeting 235 mtpa by FY28-29 — and its goal to lift market share from 25 per cent to 28 per cent are central to Axis Direct’s positive stance. The brokerage projects a 14 per cent volume CAGR over FY25–27E, supported by cost-reduction initiatives of Rs 200–300 per tonne.
Ambuja Cements (Buy | Target Price: Rs 705)
Ambuja is undergoing a major expansion, targeting a capacity of 155 mtpa by FY28, up from its earlier 140 mtpa goal. Axis expects a 12 per cent CAGR in both volume and revenue over FY24–27E, backed by the company’s sharp focus on efficiency and cost optimization. Ambuja aims to reduce production costs to Rs 4,000 per tonne by FY26.
Dalmia Bharat (Buy | Target Price: Rs 2,550)
Axis Direct expects Dalmia Bharat’s growth to be supported by its ongoing expansion projects and steady cost-saving efforts. The brokerage projects a 7 per cent volume CAGR, with EBITDA margins expected to remain strong at 21–22 per cent over FY26–27E. The company is targeting cost savings of Rs 150–200 per tonne over the next two years.
JK Lakshmi Cement (Buy | Target Price: Rs 1,030)
JK Lakshmi Cement outperformed the sector in Q2FY26, posting a 15 per cent year-on-year growth in sales volume. The company plans capacity additions of 4.6 mtpa in grinding and 2.3 mtpa in clinker by FY27–FY28. Axis expects an 18 per cent CAGR in EBITDA per tonne over FY25–27E, supported by cost efficiencies and strategic growth initiatives.