Best Cement Stocks in September 2024 Based on 5Y CAGR

Cement is crucial in shaping the infrastructure, from towering skyscrapers and sprawling residential communities to essential roadways and bridges. The market size of India’s cement industry reached 3.96 billion tonnes in 2023 and is likely to touch 5.99 billion tonnes by 2032, reflecting a CAGR of 4.7% during 2024-32.

Investing in cement stocks showcases a unique opportunity to capitalise on the cyclical construction industry. In the article below, we will explore the best cement stocks in September 2024 based on 5Y-CAGR.

Best Cement Stocks in September 2024 – Based on 5Y CAGR

Note: The best cement stocks listed here have been selected from the Nifty 500 universe and sorted based on 5Y CAGR as of September 05, 2024.

Overview of 5 Best Cement Stocks in India

1. India Cements Ltd: India Cements Ltd is a leading cement manufacturing company headquartered in Chennai. While retaining cement as its mainstay over the years, India Cements has ventured into related fields like shipping, captive power, and coal mining that have purposeful synergy with the core business. Recently, UltraTech Cement, owned by the Aditya Birla Group, has approved the acquisition of a 32.72% equity stake from the promoters and their associates in India Cements. UltraTech had previously invested in India Cements to buy a 22.77% stake at ₹268 per share in June 2024. With the improved operating performance, there was a turnaround with a positive EBIDTA of ₹163 crores for FY24 from a negative EBIDTA of ₹140 crore in FY23.

Key Metrics

• ROE: -4.81%
• ROCE: -0.78%

2. J.K Cement Ltd: JK Cement Ltd manufactures and sells cement and cement-related products. The company has over four decades of experience in cement manufacturing and is an affiliate of the multidisciplinary industrial conglomerate JK Organisation. As of June 30, 2024, the company has a Grey Cement Capacity of 24.34 MTPA, White Cement & Wall Putty Capacity of 3.05 MTPA and Coal Based Captive Power Capacity of 77.50 MW. The company is optimistic about the ongoing expansion of 6 MTPA to be commissioned in FY26, which will help the company to increase cement capacity to 30 MTPA with an increased share in Central India.

Key Metrics

• ROE: 15.9%
• ROCE: 15.8%
• Dividend Yield: 0.35%

3. Grasim Industries Limited: Grasim Industries Limited is the flagship company of the Aditya Birla group and ranks amongst India’s largest private-sector companies. On a standalone basis, GIL’s core businesses comprise viscose Staple fibre (VSF), caustic soda, speciality chemicals, and rayon-grade wood pulp (RGWP), with plants at multiple locations. Cement added 13.8 mtpa grey cement capacity across locations, which took the total India grey cement capacity to 140.8 mtpa for FY24.

Key Metrics

• ROE: 6.90%
• ROCE: 9.30%

4. Ambuja Cements Ltd: Ambuja Cements Ltd is among the leading cement companies in India and a member of the Adani Group. Currently, Ambuja Cement operates its business via six integrated cement manufacturing plants and 8 cement grinding units across the country. As of Q1 FY2025, the capacity utilisation stood at 80% and the capacity reached 88.9 MnT. The company is well poised for growth with 89 MTPA capacity (21.4 MTPA added in the last 18 months) and is on track to achieve 140 MTPA by 2028.

Key Metrics

• ROE: 10.3%
• ROCE: 14%

5. RHI Magnestia India Ltd: RHI Magnestia India Ltd, earlier known as Orient Refractories Limited (ORL), is in the business of manufacturing and marketing special refractory products, systems

and services to the steel industry in India and Globally. For FY24, the company’s cement capacity reached 537kt. The company has received orders from one of the largest pellet plants in India further demonstrating its capabilities.

Key Metrics

• ROE: 4.04%
• ROCE: 8.41%

Conclusion

Infrastructure and construction expansion are intimately correlated with the growth of the cement sector. Adding cement stock to your portfolio could aid in portfolio diversification. But before investing, thorough research is required.

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.