Cement – Sector Report – Finding opportunities amid overcapacity
Published on 31 Dec 2025
We are initiating coverage on 3 cement manufacturing companies – JK Cement (JKCE), JK Lakshmi (JKLC), and JSW Cement (JSWC) – with a positive outlook at current lower valuations. India’s cement demand growth has slowed down substantially in the last 18 months due to election-led disturbance, GoI’s focus on other strategic sectors, and general weakness in the economy led by global uncertainties. We expect overall demand to grow at ~6.5% CAGR over the next 3 years, aided by rural housing. We believe GoI’s spending on domestic infrastructure would pick up over the next few months in relatively underdeveloped regions and can augment this growth rate. Urban real estate sector is steady and is expected to grow led by ongoing urbanization, rising affordability, evolving consumer aspirations, and rising employment opportunities in Tier 2 cities. Commercial real estate activities are also likely to be robust on rising manufacturing share in GDP. We initiate coverage with ‘Accumulate’ rating on JKCE/ ‘BUY’ rating on JKLC/ ‘BUY’ rating on JSWCEMEN with TP of Rs6,173/Rs891/Rs143 valuing at 15x/10x/12x EV of Mar’28E EBITDA.
