Best Cement Stocks in India in October 2024 – 5yr CAGR Basis

India is the world’s second-largest cement producer, contributing over 8% of global capacity. The country’s cement industry has significant growth potential, especially with the ongoing infrastructure and construction development. Increased rural housing demand has driven steady cement consumption in India, as it’s one of the most affordable building materials per kilogram. Key government initiatives, such as creating 98 smart cities, are expected to stimulate the industry further. 

In 2023, India’s cement market reached 3.96 billion tonnes and is projected to grow to 5.99 billion tonnes by 2032, with a compound annual growth rate (CAGR) of 4.7% from 2024 to 2032. In FY23, India’s cement production rose by 6.83% year-on-year, reaching 374.55 million tonnes. In this article, let’s look at some of the best cement stocks in India for October 2024 based on the 5-year CAGR. 

Best Cement Stocks In India In October 2024 – 5-Year CAGR Basis

Note: The top cement stocks list in India listed in the stock market here are sorted as per the 5-yr CAGR as of October 04, 2024. 

Overview of 5 Cement Sector Stocks in India in October 2024

• India Cements Ltd

India Cements Ltd is a major cement manufacturer based in Chennai, founded in 1946 by Shri S N N Sankaralinga Iyer and Sri T S Narayanaswami. While cement remains its primary business, the company has expanded into related areas like shipping, captive power, and coal mining, which complement its core operations. Additionally, India Cements sponsors the IPL team “Chennai Super Kings.”

In the quarter ending June 2024, India Cements Ltd’s revenue dropped to ₹971.53 crore, down from ₹1,245.38 crore in the previous quarter. Its net profit also fell to ₹57.46 crore from -₹29.33 crore in the earlier quarter.

Key metrics: 

• Earning per share (EPS): -₹2.25
• Return on equity (ROE): –1.29%
• J K Cements Ltd

With over 40 years of experience, the company specializes in manufacturing and selling cement and related products. It is affiliated with the JK Organisation, a large and diverse industrial group. The company is one of the top 10 grey cement producers in India, ranking as the fifth-largest in North India and the sixth-largest in the central region.

In the quarter ending June 2024, J K Cement Ltd’s revenue dropped to ₹2,643.09 crore, down from ₹2,938.94 crore in the previous quarter. Its net profit also decreased to ₹202.68 crore, compared to ₹235.95 crore in the earlier quarter.

Key metrics: 

• EPS: ₹117.39
• ROE: 16.94%
• Grasim Industries Limited

Grasim Industries Limited is the main company of the Aditya Birla Group and is one of the largest private sector companies in India. Its core businesses include viscose staple fibre (VSF), caustic soda, speciality chemicals, and rayon-grade wood pulp (RGWP), with manufacturing plants in various locations. Additionally, Grasim is involved in other sectors, such as fertilisers and textiles.

For the quarter ended June 2024, the company’s revenue increased to ₹6,893.87 crore from ₹6,767.51 crore in the preceding quarter. Meanwhile, the net profit decreased to -₹52.12 crore from -₹440.93 crore in the previous quarter. 

Key metrics: 

• EPS: ₹7.91
• ROE: 1.03%
• Ambuja Cements Ltd

Ambuja Cements Ltd is one of India’s leading cement companies and is a member of the Adani Group. The company has a cement production capacity of 31 million tonnes, operating six integrated manufacturing plants and eight grinding units across the country. Ambuja Cement is part of a larger group that includes ACC and Sanghi Cements in the cement sector.

For the quarter ended June 2024, the company’s revenue decreased to ₹4,515.79 crore from ₹4,780.32 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹570.65 crore from ₹532.29 crore in the previous quarter. 

Key metrics: 

• EPS: ₹9.18
• ROE: 6.11%
• RHI Magnesita India Ltd

RHI Magnesita India Ltd, previously called Orient Refractories Limited (ORL), manufactures and sells specialised refractory products, systems, and services for the steel industry both in India and worldwide. It is the leading provider of special refractories in India and has numerous global customers who rely on its high-quality products.

For the quarter ended June 2024, the company’s revenue decreased to ₹701.16 crore from ₹736.23 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹81.64 crore from -₹230.02 crore in the previous quarter. 

Key metrics: 

• EPS: -₹1.62
• ROE: –0.86%

Cement Sector Outlook

The Indian government is committed to developing infrastructure to boost economic growth and aims to provide complete infrastructure coverage for building smart cities. Plans are in place to enhance railway capacity and improve handling and storage facilities for cement, which will help reduce transportation costs. These initiatives are expected to increase construction activity across the country, leading to higher demand for cement.

The eastern states of India are seen as new and untapped markets for cement companies, potentially benefiting their profits in the future. In the next decade, India could become a major exporter of clinker and grey cement to the Middle East, Africa, and other developing countries. Cement plants located near ports, such as those in Gujarat and Visakhapatnam, will have a logistical advantage for exports, allowing them to compete effectively with inland cement plants. India’s cement production capacity is projected to reach 550 million tonnes by 2025, and several foreign companies are anticipated to enter the cement market due to attractive profit margins and consistent demand.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.