Best Cement Stocks in February 2025 Based on 5Y CAGR; India Cements, Grasim Industries, Ambuja Cements & More

India, being the second-largest producer of cement in the world, accounts for over 8% of the global installed capacity. With a rapidly growing infrastructure and construction sector, the country holds immense potential for further development. In this article, check the best cement stocks in India for February 2025, based on the 5-year CAGR and other parameters like market cap and net profit margin.

Best Cement Stocks in February 2025 – Based on 5yr CAGR

Note: The best cement stocks in India for February 2025 listed here are as of January 27, 2025. The stocks are picked from the Nifty 500 universe and sorted based on the 5-yr CAGR.

Overview of the Best Cement Stocks in February 2025

1. J K Cement Ltd

J K Cement Ltd is involved in the manufacturing and selling of cement and cement-related products with more than 4 decades of experience in cement manufacturing. In Q3 FY25, the company reported a 14% quarter-on-quarter (QoQ) growth in revenue from operations, reaching ₹2,930 crore, compared to ₹2,560 crore in Q2 FY25. However, revenue remained almost flat on a year-on-year (YoY) basis, as it was ₹2,935 crore in Q3 FY24.

The company’s profit after tax (PAT) saw a 40% QoQ increase, rising to ₹190 crore in Q3 FY25, up from ₹136 crore in Q2 FY25. However, compared to the same period last year, PAT declined by 33% from ₹284 crore in Q3 FY24.

Key metrics:

• ROCE: 14.27%
• ROE: 15.88%

2. India Cements Ltd

India Cements Ltd is one of the leading cement manufacturing companies. It is headquartered in Chennai. Consolidated Net Sales for Q3 FY25 stood at ₹940.81 crore, compared to ₹1,144.46 crore in the same period of the previous year. However, Profit After Tax (PAT) increased to ₹196.22 crores, up from ₹0.67 crores in Q3 FY24.

Key metrics:

• ROCE: -0.25%
• ROE: -3.98%

3. Grasim Industries Ltd

Grasim Industries Limited, the flagship company of the Aditya Birla Group, is one of India’s largest private sector firms. On a standalone basis, GIL’s core businesses include Viscose Staple Fibre (VSF), caustic soda, speciality chemicals, and rayon-grade wood pulp (RGWP), with manufacturing facilities at various locations. Additionally, the company is involved in other sectors such as fertilisers, textiles, and more.

In Q2 FY25, the company registered a revenue of ₹33,563 crore, reflecting an 11% YoY growth compared to ₹30,221 crore in Q2 FY24. The PAT declined to ₹473 crore, a 59% decrease from ₹1,164 crore in Q2 FY24.

Key metrics:

• ROCE: 7.19%
• ROE: 4.30%

4. Ambuja Cements Ltd

Ambuja Cements Ltd is one of the leading cement companies in India. Revenue from operations for the quarter ended September 2024 was ₹7,516 crore, compared to ₹8,311 crore in the quarter ended June 2024 and ₹7,424 crore in the quarter ended September 2023. Profit after tax (PAT) stood at ₹473 crore in the quarter ended September 2024, down from ₹783 crore in the quarter ended June 2024 and ₹987 crore in the quarter ended September 2023.

Key metrics:

• ROCE: 11.63%
• ROE: 7.98%

5. UltraTech Cement Ltd

UltraTech Cement is involved in the manufacturing and sale of cement and cement-related products mainly across the globe. The company’s consolidated net sales for Q3 FY25 were ₹16,971 crore, compared to ₹16,487 crore in the same period of the previous year. Profit after tax decreased to ₹1,470 crores during Q3 FY25, compared to ₹1,777 crores in the previous year.

Key metrics:

• ROCE: 14.06%
• ROE: 12.22%

Best Cement Stocks in February 2025 – Based on Market Cap

Note: The best cement stocks in India for February 2025 listed here are as of January 27, 2025. The stocks are sorted based on the market cap.

Best Cement Stocks in February 2025 – Based on Net Profit Margin

Note: The best cement stocks in India for February 2025 listed here are as of January 27, 2025. The stocks are sorted based on the net profit margin.

Cement Sector Growth in India

India is the world’s second-largest cement producer, contributing over 8% to the global installed capacity. The country holds significant potential for growth in the infrastructure and construction sectors, with the cement industry poised to benefit greatly from these developments.

In 2023, the market size of India’s cement industry reached 3.96 billion tonnes and is projected to grow to 5.99 billion tonnes by 2032, reflecting a CAGR of 4.7% from 2024 to 2032.

Between FY12 and FY23, the installed capacity increased by 61%, rising from 353 million tonnes in FY12 to 570 million tonnes in FY23. The cement sector’s capacity in India is expected to expand at a CAGR of 4-5% through FY27.

Factors to Consider Before Investing in the Cement Stocks

• Demand for Infrastructure and Construction: The growth of the infrastructure and real estate sectors directly impacts the demand for cement.
• Government Initiatives: Government policies and initiatives such as smart cities, housing for all, and infrastructure development schemes drive cement demand.
• Raw Material Costs: The cost of raw materials like limestone, coal, and gypsum plays a crucial role in determining profitability.
• Capacity Expansion: Expansion plans, mergers, or acquisitions can indicate growth prospects for cement companies.
• Environmental Regulations: Increasingly stringent environmental regulations can affect operational costs and production methods.
• Supply Chain & Logistics: The ability of cement companies to efficiently manage their supply chain and logistics affects margins.
• Financial Health of Companies: Look at debt levels, cash flow, and profit margins for a clearer understanding of a company’s stability.

Who Should Invest in Cement Stocks?

Cement stocks can be an option for long-term investors looking to capitalise on the growth of India’s infrastructure and real estate sectors. These stocks can be attractive to conservative investors due to their steady demand, low volatility, and the potential for dividends. However, investors should be prepared for cyclical fluctuations in demand based on macroeconomic factors such as interest rates and government policies.

Conclusion

The cement sector in India can present growth prospects driven by infrastructure development and urbanisation. However, investors must carefully evaluate each company’s financials, market positioning, and risks before making an investment decision.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.