2 Cement Stocks That Had a Weak Q4 but Analysts Expect it to Boom

Synopsis: A global brokerage maintains buy calls on two major cement names despite a disappointing March quarter, pointing to cost reset and operational recalibration as the path forward. 

A leading global brokerage has held its ground on two of India’s largest cement makers even after a rough March quarter, flagging sticky costs and execution gaps as near-term headwinds. But with target prices implying upside of up to 34%, Jefferies sees the current weakness as a reset rather than a structural breakdown – provided managements follow through on cost discipline and operational fixes. Reset Mode: Can These Cement Heavyweights Deliver on Their Promises? 

Ambuja’s Rough Quarter and the Cost Problem

Ambuja Cements posted consolidated revenue from operations of ₹10,915 crore in Q4FY26, up 9% year-on-year, but the profitability picture was far less encouraging. EBITDA fell 22% year-on-year to ₹1,464 crore, with EBITDA margin contracting sharply to 13.4% from 18.7% in the same quarter last year. Reported PAT came in at ₹1,857 crore, though normalised PAT – which strips out one-time tax benefits from the Sanghi and Penna mergers – stood at ₹569 crore. 

Jefferies flagged that costs remained sticky through the quarter, with power and fuel expenses, branding costs, packing material, and additional goods tax in certain states all adding pressure to margins simultaneously.

Ambuja’s Bigger Picture and the Road Ahead

For the full year FY26, the consolidated numbers were more reassuring. Revenue from operations grew 15% to ₹40,656 crore, while annual EBITDA came in at ₹6,539 crore at a margin of 16.1%. Volume for the year grew 16% to 73.7 million tonnes, ahead of industry growth. Management acknowledged a reset on the operational front after failing to deliver the performance promised to shareholders – a candid admission that Jefferies noted. 

The brokerage maintained its Buy rating with a target price of ₹595 i.e. an upside potential of around 34% from current levels , seeing scope for improvement if cost controls are implemented effectively and newly commissioned capacities are stabilised. The company targets bringing total cement costs down by ₹150–200 per tonne in FY27 from the current level of approximately ₹4,400 per tonne.

ACC Faces Similar Headwinds

ACC reported Q4FY26 consolidated revenue of ₹7,146 crore, with operating profit margin declining sharply from 14% in Mar 2025 to 9% in Mar 2026 as cost pressures mirrored those seen at the parent platform. Reported PAT for the quarter stood at Rs 238 crore. Much like Ambuja, the margin story was the key concern – EBITDA per tonne fell significantly as energy costs, logistics, and other expenses stayed elevated. 

Jefferies retained its Buy rating on ACC with a target price of ₹1,830, implying about 32% upside. The brokerage noted that management acknowledged disappointment with cost performance in Q4 and for the full FY26, partly attributing it to execution failures in turning around acquired entities.

ACC’s Path to Recovery

Jefferies has trimmed its earnings estimates for ACC slightly to reflect the softer near-term outlook. Capital expenditure plans have been scaled down in the short term, with capacity expansion timelines revised – mirroring the approach at Ambuja of stabilising first before growing. At the sector level, cement demand is expected to remain soft at around 5% in FY27, weighed down by a forecast of below-normal monsoon and fuel price volatility from the ongoing West Asia conflict.

Both companies are betting on market share gains and a higher share of premium products to outpace that broader industry growth rate, though delivering on that in an environment of persistent cost pressure will require sharper ground-level execution.

For retail investors watching the cement space, the Jefferies calls suggest that the current dip may offer an entry point – but only for those willing to look past near-term pain and trust that the operational reset delivers visible results over the next few quarters.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post 2 Cement Stocks That Had a Weak Q4 but Analysts Expect it to Boom appeared first on Trade Brains.