HSBC upbeat on India's cement sector; UltraTech top pick

Recent major deals in the Indian cement sector has accelerated the pace of consolidation and will likely drive prices, analysts at HSBC says

HSBC says top four firms in the sector - UltraTech ULTC.NS, Ambuja Cements ABUJ.NS, Dalmia Bharat DALB.NS, Shree Cement SHCM.NS - now have combined market share of 57%

Says, top four will likely dominate capacity additions in FY26, which will peak in the fiscal

Expects demand recovery in the sector from the second half of FY26 as government spending will likely boost annual demand growth; sees rise in prices from November onwards

UltraTech remains HSBC's top pick with "buy" rating, upgrades rating on ABUJ to "buy" from "hold," citing cost saving measures and improved capacity at acquired plants

Adds, DALB (rated "buy" ) to benefit from improved pricing in the South and East regions of the country; SHCM is rated "hold"

On the day, ULTC and ABUJ up 0.6% and 0.9%, respectively; while DALB and SHCM 0.6% and 0.9%