Best Cement Stocks to Buy in 2024

Best Cement Stocks to Buy in 2024 – SMC Trade Online

India is the world’s second-largest producer of cement, accounting for around 7% of the world’s overall production. Strongholds in this industry that significantly boost GDP and employment are UltraTech Cement, ACC Limited, and Ambuja Cements. Their performance is a reflection of housing projects and government infrastructure investments, as well as market trends.

What are Cement Stocks?

Cement stocks are shares of companies primarily involved in producing and distributing cement, a building material necessary for constructing houses, businesses, and infrastructure. These companies give investors an insight into the performance of the cement business, which is strongly correlated with urbanisation, economic expansion, and building activity.

Top 10 Cement Stocks to Invest in 2024

Here is a comprehensive compilation of the most promising stocks to invest in 2024.

  1. UltraTech Cement Ltd
  2. Grasim Industries Ltd
  3. Ambuja Cements Ltd
  4. Shree Cement Ltd
  5. ACC Ltd
  6. Dalmia Bharat Ltd
  7. J K Cement Ltd
  8. Ramco Cements Ltd
  9. RHI Magnesita India Ltd
  10. Birla Corporation Ltd

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Overview of Best Cement Stocks to Invest in India

UltraTech Cement Ltd

UltraTech, a global cement giant, holds the top spot as India’s largest grey cement, RMC, and white cement manufacturer, with a capacity of 121.5 MTPA. Its strategic acquisitions, robust RMC presence, debt reduction focus, and expansive growth plans reinforce its leadership in the industry.

Grasim Industries Ltd

The Aditya Birla Group’s flagship, Grasim Industries, thrives in cement leadership via UltraTech Cement, boasting 116+ MTPA capacity. Beyond cement, it diversifies into viscose, yarn, chemicals, and textiles. Headquartered in Mumbai, Grasim operates in various sectors, including finance with Aditya Birla Capital, making it a top cement stock.

Ambuja Cements Ltd

Ambuja Cements Ltd, once Gujarat Ambuja Cements Ltd, is a prominent player in India’s cement sector, now under the Adani Group. With 30 MTPA capacity, it leads with efficiency and infrastructure, poised for growth in post-pandemic demand.

Shree Cement Ltd

Shree Cements, India’s second-largest cement group since 1979, plans to double its capacity to 80 MTPA in 6-7 years. Despite challenges, strategic efficiency and sustainability maintain northern market leadership, anticipating improved margins.

ACC Ltd

ACC Limited, part of the Adani group, operates 5 integrated plants and 8 grinding units with a 36 MTPA capacity. Despite a 3% volume growth in H1CY22, rising costs caused a 43% drop in EBITDA per ton for H1 2022. Expanding to 39.3 MTPA, ACC aims to strengthen its presence in central and eastern India.

Dalmia Bharat Ltd

Dalmia Bharat, a prominent Indian cement manufacturer, stands out for its sustainable practices and innovative products. Its robust cement business spans diverse regions, vital in advancing the nation’s infrastructure growth.

J K Cement Ltd

JK Cement is well-known for its strong brand recognition and superior goods in home and foreign markets. In the cement sector, the company is praised for its inventiveness and environmentally friendly methods.

Ramco Cements Ltd

Ramco Cements, a notable cement company, is acknowledged for its dedication to quality and efficiency. With a substantial market presence, advancing the construction and development sectors is crucial.

RHI Magnesita India Ltd

As a subsidiary of global refractory leader RHI Magnesita, it has emerged as a critical manufacturer in India. Specialising in high-performance solutions for steel, cement, and non-ferrous metals industries, it contributes significantly to India’s industrial infrastructure.

Birla Corporation Ltd

Birla Corporation Limited, an Indian holding company, operates in Cement, Jute, and Other segments. Specialising in cement and clinker manufacturing, its products, like MP Birla Cement and jute items, contribute to diverse industries.

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Latest Performance of Top 10 Cement Stocks

Company Name Mar Cap Rs.Cr. ROCE % CMP / BV Debt / Eq

%

ROE % P/E Div Yld %
UltraTech Cement Ltd 2,88,747 12.9 10,001 20.4 9.63 45.0 0.38 
Grasim Industries Ltd 1,46,589 9.97 2,194 0.60 8.85 26.1 0.46 
Ambuja Cements Ltd 1,19,775 12.6 603 1.8 10.8  36.7 0.41
Shree Cement Ltd 95,550 8.99 26,490 0.14 7.45 40.6 0.38
ACC Ltd 50,315 10.0 2,680 0.00 7.06 30.0 0.35
Dalmia Bharat Ltd 39,216 8.48 2,090 0.241 6.97 32.4 0.43
J K Cement Ltd 33,549 10.4 4,344 0.68 9.48 48.5 0.35
Ramco Cements Ltd 20,491 6.55 867 5.4 5.14 48.1 0.23
RHI Magnesita India Ltd 12,260 14.6 594 0.21 16.0 65.2 0.42
Birla Corporation Ltd 13,048 3.73 594 0.728 0.75 43.7 0.15

*Note=Stocks data may change; users advised to use live data before making decisions.

Overview of the Cement Stocks in Indian Market

The Indian cement sector, influenced by the construction industry, exhibits cyclical patterns and vulnerability to economic downturns. Despite this, sustained growth stems from rising infrastructure demand and urbanisation. The industry’s fragmentation, featuring small to mid-sized companies and large multinationals, exposes investors to a pivotal economic sector.

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Advantages and Risks Associated with Investing in Cement Stocks

Significant advantages of investing in cement stocks include:

  • Consistent Demand: Because of its ongoing need, cement provides a reliable source of income for businesses.
  • Infrastructure Expansion: The surge in infrastructure projects anticipates sustained growth for cement firms.
  • Dividend Attraction: Cement companies often present alluring dividend yields, appealing to income-oriented investors.
  • Portfolio Diversification: Including cement stocks in a portfolio provides diversification, lowering overall investment risk.

Increased infrastructure spending and real estate momentum boost cement demand. However, escalating energy costs pose short-term risks. Any delays in capacity expansion or fears of another COVID-19 wave present significant challenges for cement companies.

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Why Should You Invest in Cement Stocks in India?

Investing in Indian cement stocks provides a strategic entry into a critical market essential for the nation’s infrastructure progress. As the world’s second-largest cement producer and third-largest consumer, cement equities are appealing, reflecting the industry’s resilience, continuous demand, and government emphasis on infrastructure development.

How to Start Investing in Cement Stocks?</h2?

SMC, your dedicated companion for navigating the complexities of the financial world, turns your investment journey into a rewarding experience in the cement stocks sector.

Here are three easy steps to start investing in Cement stocks :

  1. Go to the official website of SMCtradeonline or simply download the SMC ACE App
  2. Open a free demat account
  3. Start investing

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Conclusion

Cement stocks, including industry leaders like UltraTech Cement and Grasim Industries, offer investors a promising avenue for sustained returns, given the sector’s consistent demand, dividend attractiveness, and potential for portfolio diversification.

The industry’s long-term prospects remain optimistic despite short-term challenges like rising energy costs and pandemic-related uncertainties. As one of the pivotal sectors influencing the nation’s GDP, investing in cement stocks aligns with the broader narrative of India’s economic development.

Author: All Content is verified by SMC Global Securities.

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