Cement Sector Rally Strengthens as GST Cut Buzz Lifts FY26 Outlook

Cement shares seem all set to be among the biggest winners this FY26, with hopes built on reducing the Goods and Services Tax (GST) from 28% to 18% by the announcement. Analysts see demand unlocking, margin boosting, and executable possibilities triggering exciting re-ratings across the dullest industries.

The rally was further strengthened by constant price increases accompanied by good Q1 volumes and strong performance results. The fact that there is an upturn in tax relief rumors has piqued interest. ICICI has also done some homework to suggest that every single percentage change from realization amounts to a 3-5% swing in EBITDA-per-head, making its vantage profitability pill very solid. The consumer will benefit first, while the general expectation is for prices to improve. Top pick remains Ultratech.

However, unlike tiles, metals, and sanitaryware that are taxed at 18%, cement, till now, has been in the highest GST slab. Choice Broking found that a lower slab would work a dual advantage, increasing both consumption as well as capacity utilization. The firm revised its demand growth estimates for FY27-28 upwards to 8-10% (against 6-8% earlier), with an estimated price boost of ₹60-100 per tonne, while EBITDA per tonne gains are pegged at 15-25%. Stocks such as ACC, Birla Corporation, and JK Lakshmi should be seeing gains of as much as 30%.

Market performance was already impressive. JK Cement was up 50% in FY26; the other players like Nuvoco Vistas, Star Cement, India Cements, and Ramco Cements enjoyed a rally of 20-45%. Of the majors, Ambuja was up by 8%, while ACC was down by 6%. Besides, they’re also doubling down, as domestic mutual funds pile even more into 8 of the top 10 cement firms in the June quarter.

Earnings have been installed, backing up the optimism. Nuvoco Vistas saw a mighty rocket ship ride, up 4589% for Q1 PAT to ₹133 crore; Star Cement soared by 217%, while PAT for JK Cement increased by 75%. Ambuja raked in a 24% increase in profits while Ultratech, the biggest player in its industry, came close with revenues of ₹21,275 crore and a 49% profit boost at ₹2,225 crore.

As far as good fundamentals, consolidation trends, and likely tax relief look ahead, analysts have predicted that cement will remain one of the most interesting investment ideas across FY26.