loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Cement Sector - GST 2

ICICIdirect Research 22 Aug 2025 DISCLAIMER

Cement is likely to be put under the 18% bracket (from 28% at present). At 28% GST, cement is amongst the highest taxed construction material (as compared to 12-18% on other materials like granites, marbles, steel, ceramic tiles and sanitary wares etc).
Assuming average all-India MRP of Rs 360 per 50 kg bag, GST rate cut can reduce the overall cement prices by ~Rs 25 per bag. We believe that, though cement demand is largely inelastic, a lower GST rate could reduce the overall cost of infrastructure and housing construction, thereby boosting long-term demand.
Cement demand has picked-up considerably in FY26E after a muted FY25. Ambuja’s management is guiding overall demand CAGR at 7-8% over the next 4-5 years, which will outpace overall supply growth of ~6% CAGR over the same period.
Profitability outlook remains strong for cement companies considering the healthy demand expectations and continuous focus on operational efficiencies. In the recent quarter Q1FY26, we have already seen overall volume growth of 8% YoY with an average EBITDA/ton of Rs 1100+/ton (as against Rs 860/ton in Q1FY25).
Top beneficiaries – Ultratech(target price – 15000), Ambuja Cements (target price – 700), Dalmia Bharat (target price - 2650), JK Lakshmi Cement (target price – 1100) & Sagar Cement (target price – 305)

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere