Ray expects demand to improve in the second half of 2026-27 (FY27), saying delayed construction activity from the past two years is likely to return. “The pent-up demand from FY25-26 is still there and which is expected to come in second half of FY27 onwards. Even FY28 will be a boom I can say for the cement volume perspective,” he said.
While demand is expected to improve, pricing may take a little longer. Ray said the usual pre-monsoon price hike did not materialise this year, but he does not expect any meaningful correction either. “Second quarter will be little subdued… if any UltraTech Cement we are expecting, that will happen in second half of FY27, not before that,” he said, adding that prices have remained stable after the goods and services tax (GST) rate cut.
Among individual companies, Ray remains positive on India Cements‘s long-term growth. He said the company’s ability to keep costs under control despite higher fuel, diesel and packaging expenses stood out in the latest quarter. He also expects cost pressures to remain manageable because of UltraTech’s fuel mix.
Ray said UltraTech’s target of reaching 242 million tonne of capacity by FY28 is a significant milestone. He added that the company has consistently demonstrated its ability to integrate acquired assets efficiently, citing Nuvoco Vistas
as an example where capacity utilisation has improved after the acquisition.
He is also constructive on Ambuja Cements, saying the market is closely watching the ramp-up of its Vadraj Cement acquisition. According to Ray, the company has steadily improved its capacity utilisation to more than 80%, while the Gujarat expansion could become the next major trigger for the stock.
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On regional demand, Ray expects eastern and central India to outperform, supported by infrastructure projects and improving construction activity. He noted that several cement companies have reported double-digit volume growth despite elections and extreme summer conditions, indicating that FY27 has begun on a strong footing.
Among his preferred stocks, Ray named Birla Corporation, JK Lakshmi Cement, Nuvoco Vistas and JK Lakshmi Cement. While he remains positive on UltraTech’s business fundamentals, he believes its current valuations are relatively expensive and would prefer to wait for more clarity over the next few quarters.
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