Cement stands as an indispensable cornerstone within the realm of construction, bearing a significant impact on the infrastructure and development of nations. Within this context, India’s dynamic internal growth serves as a key catalyst propelling the cement industry forward. In this article, we present our carefully curated selection of the top 10 cement stocks available for trading on the Indian stock exchange.
The Context
The cement industry isn’t a distinct sector; instead, it functions as a foundational commodity that underpins the construction industry. It serves as a binding agent, solidifying and adhering to building materials such as stones, rather than being used in isolation.
In other words, it’s a kind of glue utilized in civil engineering projects, just like Fevicol (Pidilite product). Cement companies, in any country, play a major role in the growth of the nation. The cement industry is the second most important primary and basic industry for the economic development of India.
It’s second only after iron and steel
The government in India had comprehensive control and oversight over the cement business, but after the economic reform, there was a significant amount of relaxation. As per an India Brand Equity Foundation (IBEF) report, despite being the second-largest cement producer, India falls on the list of lowest per capita consumption of cement @ 125 kg.
These are the poor rural people who mostly live in makeshift cottages and cannot afford this commodity. Despite this fact, the demand and supply of cement in India have accelerated to a good extent. The possibilities of growing the cement business are always quite high in a rapidly evolving economy like ours.
India is the second-largest producer of cement in the world and accounts for more than 7 percent of the global installed capacity. India has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it.
Some of the recent initiatives, such as the development of 98 smart cities, are expected to provide a major boost to the sector. Aided by favorable Government foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past.
A significant factor that aids the growth of this sector is the ready availability of raw materials for making cement, such as limestone and coal. India’s overall cement production accounted for 294.4 MTPA in FY21 and 329 MTPA in FY20.
With the government of India offering a boost to various infrastructure projects, housing facilities, and road networks, the cement industry in India is currently growing at an enviable pace. More growth in the Indian cement industry is expected in the coming years and so is the opportunity for retail investors.
💡MTPA in the writeup stands for Million tons per annum.
Below, you will find a list of the top 10 cement stocks actively traded on the Indian stock exchange.
1. UltraTech Cement Ltd
UltraTech Cement Ltd. is one of the top-ranked cement stocks in India. UltraTech Cement Limited is the cement flagship company of the Aditya Birla Group.
A $5.9 billion building solutions powerhouse, UltraTech is the largest manufacturer of grey cement, ready mix concrete (RMC), and white cement in India. It is the third-largest cement producer in the world, excluding China. UltraTech is the only cement company globally (outside of China) to have 100+ MTPA of cement manufacturing capacity in a single country.
The UAE, Bahrain, Sri Lanka, and India are among the locations where the company conducts business. UltraTech has a network of over one lakh channel partners across the country and has a market reach of more than 80% across India.
In the white cement segment, UltraTech goes to market under the brand name Birla White. It has one white cement unit and one wall care putty unit, with a current capacity of 1.5 MTPA. With 130 Ready Mix Concrete (RMC) plants in 50 cities, UltraTech is the largest manufacturer of concrete in India.
It also has a slew of specialty concretes that meet the specific needs of discerning customers. Their Building Products business is an innovation hub that offers an array of scientifically engineered products to cater to new-age constructions.
Fun fact– UltraTech pioneered the UltraTech Building Solutions (UBS) concept to provide individual home builders with a one-stop solution for building their homes. UBS is the largest single-brand retail chain with over 2500 stores across India.
2. Ambuja Cements Ltd
On this list of the top 10 Indian cement stocks, Ambuja Cement is ranked second. Ambuja Cements Ltd. is a member of Holcim. It is a global leader in innovative and sustainable building solutions and is among the leading cement companies in India.
Ambuja Cement aims to provide hassle-free, home-building solutions with its uniquely sustainable development projects and environment-friendly practices since it started operations. Currently, Ambuja Cement has a cement capacity of 29.65 MTPA with five integrated cement manufacturing plants and eight cement grinding units across the country.
The company has many firsts to its credit like a captive port with four terminals that have facilitated timely, cost-effective, cleaner shipments of bulk cement to its customers. To further add value to the customers, the company has launched innovative products like Ambuja Roof Special, Ambuja Cool Walls, Ambuja Kawach, and Ambuja Cement Compocem.
Fun fact– Ambuja Cement is the only cement company in India to be eight times water positive.
Water-positive status is conferred upon a manufacturing location only when the amount of water withdrawn for industrial usage is less than the amount of water given back to society and nature.
A plus for socially responsible investing!
3. Shree Cement Ltd
Shree Cement Ltd. is the third company on our list of the top 10 cement stocks. Shree Cements is a trusted brand in India, mainly in the northern and eastern parts of the country.
Currently, the company has manufacturing operations in North and Eastern India across six states. The business is well-known for being among the cement industry’s most effective and environmentally friendly businesses. The company had an installed capacity of 43.4 MTPA in India and 47.4 MTPA including overseas production.
Shree also has an installed Power Generation Capacity of 752 Mega Watts which includes Waste Heat Recovery Power, Solar Power, and Wind Power along with others. Shree Cement is well known for marketing innovation, including the rapid deployment of distribution networks close to markets and the creation of new market niches.
Fun fact– Bangur cement is a brand of Shree Cement. Many people would not have realised that Adolf Walter, a German scientist whose technique and procedure are used in the Bangur cement, is the English man who appears after their commercial saying “Sasta nahin sabse accha.”
4. ACC Ltd
ACC Limited is one of India’s leading manufacturers of cement and ready-mix concrete is the fourth cement stock on this list of the top 10 Indian cement stocks. This cement company owns 17 cement factories, 75 ready-mix concrete plants, over 6,700 employees, a vast distribution network of 50,000+ dealers & retailers, and a countrywide spread of sales offices.
Since its founding in 1936, ACC has continually established standards in the technology of cement and concrete. From the Bhakra Nangal Dam in 1960 to the Mumbai-Pune Expressway, ACC cement is at the foundation of iconic landmarks across the country.
Fun fact – In 2005, ACC Limited became a part of the reputed Holcim Group of Switzerland. In 2015 Holcim Limited and Lafarge SA came together in a merger of equals to form LafargeHolcim – the new world leader in the building materials industry.
5. The Ramco Cements Ltd
Ramco Cements Limited is the flagship company of the Ramco Group, a well-known business group in South India.
It is headquartered in Chennai.
The main product of the company is Portland cement, manufactured in eight state-of-the-art production facilities that include integrated cement plants and grinding units with a current total production capacity of 16.45 MTPA.
In South India, it is the most widely used brand of cement.
The business also runs one of the biggest wind farms in the nation and makes ready-mix concrete and dry mortar products.
Fun fact– When Shri. Mumbai Shah, Central Minister for Industries in the late fifties came to Madras to meet the Industrialists, he called upon Shri P A C Ramasamy Raja and requested him to start a cement factory in TN. This marked the birth of Ramco Cements Limited in 1961.
6. Dalmia Bharat Ltd
Dalmia Bharat Ltd is 6th on our list of Top 10 cement stocks. The Company has cement manufacturing plants in the southern states of Tamil Nadu (Dalmiapuram & Ariyalur) and Andhra Pradesh (Kadapa), with a capacity of 9 million tonnes per annum.
Dalmia Bharat has been a leader in cement manufacturing since 1939, DCBL is a multi-spectrum cement player with a double-digit market share and a pioneer in super-specialty cement used for Oil wells, Railway sleepers, and Airstrips.
Fun fact– Dalmia holds a stake of 74 % in OCL India Ltd., a major cement player in the Eastern Region. They recently acquired the brands Adhunik Cement & Calcom Cement in North East. The group now controls an expandable capacity of 25 million tonnes.
7. India Cements Ltd
India Cements Ltd was founded in the year 1946 by two men, Shri S N N Sankaralinga Iyer and Sri T S Narayanaswami. They possessed the ability to create dreams of an industrial India, the vision to make those dreams a reality, and the relationships and the future-building skills to do so.
From a two-plant company having a capacity of just 1.3 MTPA in 1989, India Cements has robustly grown in the last two decades to a total capacity of 15.5 MTPA. India Cements has now 8 integrated cement plants in Tamil Nadu, Telangana, Andhra Pradesh, and Rajasthan and two grinding units, one each in Tamil Nadu and Maharashtra.
Fun fact-While retaining cement over the years as its mainstay, India Cements has also ventured into related fields like shipping, captive power, and coal mining that have purposeful synergy to the core business.
8. J K Cement Ltd
JK Cement Ltd. is one of India’s leading manufacturers of Grey cement and the third-largest white cement manufacturer in the world. Due to its superior products, focus on customers, and technological leadership, the company has worked with India’s multi-sectoral infrastructure demands for more than 40 years.
JK Cement’s operations commenced with commercial production at its flagship grey cement unit at Nimbahera, Rajasthan in May 1975. The Company has an installed Grey cement capacity of 15 MTPA as of date, making it one of the top cement manufacturers in the Country.
JKCL is the No. 1 manufacturer of Wall Putty in the World and the third-largest manufacturer of White Cement, globally, with a total white cement capacity of 1.20 MTPA and wall putty capacity of 1.2MTPA
Fun fact– JK White Cement is sold across 43 countries around the globe and the Company has a strong international presence with two subsidies, JK Cement Works Fujairah FZC and JK White Cement (Africa) Ltd.
9. Sanghi Industries Ltd
Sanghi Industries Limited is one of the leading cement manufacturers in Western India. They produce and sell the best quality cement and provide effective building solutions to individual home builders and professional builders.
The business uses rigorous quality control procedures and highly automated production processes to produce superior-grade limestone and other raw materials. With full-scale manufacturing and distribution infrastructure, Sanghi boasts of being one of the most cost-efficient cement manufacturers in India.
The company caters to Gujarat, Rajasthan, Maharashtra, Madhya Pradesh, and Kerala States in the domestic market. It also exports Clinker (a stony residue from burnt coal) and Cement produced at its ultra-modern plants with 6.6 MTPA Clinker capacity and 6.1 MTPA Cement capacity.
Fun fact– Sanghi owns one of the largest limestone reserves in India with ‘A grade’ marine limestone reserves of ~ 1 Billion Metric Tons.
10. JK Lakshmi Cement Ltd
Last but not least, JK Lakshmi Cement holds the tenth spot on our list of the top 10 Indian cement stocks. JK Lakshmi Cement Limited is a part of the prestigious JK Organisation.
This eminent industrial house is over a hundred and twenty-five years old. The company boasts operations in India and abroad with a leadership presence in the fields of tyres, cement, paper, power transmissions, sealing solutions, dairy products, and textiles.
JKLC has been a renowned and well-established name in the Indian cement industry for three decades and has an annual turnover of over ₹4000 crores. The company has a formidable presence in Northern, Western, and Eastern India’s cement markets. JK Lakshmi Cement is relentlessly focused on product quality, customer satisfaction, and innovation.
This has helped them push the boundaries and tap the immense potential for development in the infrastructure and construction sectors in the country.
Right from gaining a foothold in the new and emerging markets in the country to investing in the latest R&D, they have continued to be a resilient performer despite the constantly evolving challenges of the cement sector.
With a wide network of over 400 cement dumps and more than 7000 channel partners, the JK Lakshmi Cement brand enjoys a premium position in its markets and is recognized for its immaculate quality and services.
The company’s ability to serve its customers at their doorstep is made possible by a sizable pool of highly skilled and devoted marketing and technical service team members.
Fun fact – JK Lakshmi Cement is the first cement manufacturer in India that introduced coloured bags and has a wide product portfolio catering to varied construction requirements with cement grades like OPC 43 & OPC 53, Blended Cement (PPC, PSC, and composite Cement).
Our Top 10 list of Indian cement businesses is coming to a close now.
Conclusion
As you surely have noticed, with a few notable exceptions, the Return on Equity (ROE) of the majority of cement companies in the past five years doesn’t seem to be as outstanding. These equities are often excluded from the list of constant compounders when it comes to long-term investment due to this distinctive characteristic.
Since Cement is essentially a commodity, the brand premium is almost non-existent in the industry, and in terms of value, this segment even ranks below the metal. India’s internal development is primarily what drives the country’s cement industry.
As a result, exports of cement make up a very modest portion of the sector’s overall off-take. In terms of demand, the housing sector accounts for more than half of the demand for cement. The development of flyovers, ports, and highways are just a few examples of infrastructure projects that increase the demand for cement.
Additionally, some catastrophes like war and earthquakes might occasionally temporarily increase the need for cement in the nation. The returns on cement stocks are typically impacted by variables including rising energy prices, large inventories of unsold houses, and the slowing of infrastructure projects.
Pro Tip– Before investing in cement stocks, it is generally essential to carefully review current valuations.
Note- The rankings are based on expansion projections, industry authority, and innovation potential.
If you think we’ve forgotten to include a company that you believe belongs here, please comment!
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