India Cement: Constructive on sector as cost inflation worries fade: upgrade Shree to Buy, downgrade ACEM to Hold

Research evidence excerpt

India Cement: Constructive on sector as cost inflation worries fade: upgrade Shree to Buy, downgrade ACEM to Hold

30 June 2026

India Cement EquitiesConstruction Materials

Constructive on sector as cost inflation worries fade:

upgrade Shree to Buy, downgrade ACEM to Hold India

◆ Upgrade Shree Cement (SRCM) to Buy from Hold as the Pinakin Parekh*

company’s volume growth should outpace the industry SeniorHSBC SecuritiesAnalyst, andIndiaCapitalMetalsMarketsand Cement(India) Private Limited

pinakin.parekh@hsbc.co.in

◆ Downgrade ACEM to Hold from Buy as a sustained recovery in +91 22 40891549

margins and prices is likely only in FY28

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

◆ Preferred stocks: Buy-rated UTCEM, SRCM, Nuvoco and not registered/ qualified pursuant to FINRA regulations

Dalmia; Hold JKCE and ACEM

Upgrade SRCM to Buy; downgrade ACEM to Hold: We raise our FY28-29 EBITDA

estimates for SRCM by 7-8% (our FY27e EPS cut is driven by higher depreciation, a non-

cash expense) and increase our target EV/EBITDA valuation multiple to 18x from 17x

previously as we expect SRCM’s FY27 sales volume growth to sharply outpace the

industry as the brand repositioning is now broadly behind it. SRCM remains among the

lowest cost cement producers in the country, with a net cash balance sheet. Our revised

TP of INR30,780 (vs INR26,450 previously) implies upside of 22.4% and we therefore

upgrade our rating to Buy. We cut our FY28-29 EBITDA estimates for ACEM by 6-8%.

Overall, while we like ACEM’s focus on increasing utilizations and focus on margins, we

believe a sustained volume + margin recovery is more likely in FY28. We cut our target

EV/EBITDA valuation multiple to 16x from 17x previously; our new TP of INR490 (from

INR560) implies upside of 15.5%.