What led ICICI Sec re-initiate coverage on India Cements? Find out here

India Cements share price today: Domestic brokerage ICICI Securities has reinitiated coverage on India Cements, a major Indian cement manufacturer, with a 'Hold' rating, citing improving operational fundamentals under UltraTech Cement, including green power ramp-up, kiln upgrades and brand-transition measures that could improve Ebidta beyond ₹1,000 per tonne by fiscal 2028 (FY28) from ₹334 in September quarter of FY26 (Q2FY26).

 

"India Cements has seen it all – from M&A - led buoyancy (over the past few years) to a more recent overhang of stake sale by new promoter UltraTech Cement ( to comply with minimum public shareholding norms). Hereon, it's back to fundamentals," the brokerage said.

 

 

According to the brokerage, even a sharp margin improvement will merely place the company alongside other large South-based peers. A merger with Ultratech Cement is seen as eventual, though the timing and merger ratio remain unclear. Given rising competition and potential pressure on FY28E RoE (return on equity), ICICI Securities has valued the stock at 12x FY28E EV/Ebitda and arrived at a target of ₹422.

 

India Cements surged to its target price of ₹422 today, hitting the level projected by ICICI Securities. The stock gained nearly 2 per cent from the previous session's close of ₹414.4 on the NSE. Around 11:20 AM, the stock was trading at ₹416.5, up by 0.57 per cent. In comparison, the benchmark NSE Nifty50 was up 60.05 points, or 0.23 per cent, at 25,818. The company's total market capitalisation stood at ₹12,918 crore.  CATCH STOCK MARKET LIVE UPDATES TODAY

Here’s why India Cements is back on the radar:

Imminent margin surge: Since Ultratech took management control of India Cements on December 24, 2024, it has been steadfast on its guidance of Ebitda of ₹1,000 per tonne by FY28. The company plans capex of ₹20.14 billion to increase Waste Heat Recovery Systems (WHRS) power capacity from 9MW to 27MW, ramping up renewable power from 35MW to 212MW to boost green power's share from 5 per cent to 80 per cent by FY28. Additionally, the company is eyeing conversion from 4 or 5-stage preheaters to 6-stage preheaters, cooler upgradation and process optimisation to curtail heat consumption. It also aims to increase capacity from 14.75 mtpa to 17.55 mtpa by FY28. Additionally, the brand transition to Ultratech is expected to improve realisations, supporting the projected Ebitda of ₹1,033 per tonne in FY28 from ₹360 per tonne in FY26.

 

Little upside on fundamentals; merger uncertainty looms: According to analysts, India Cements' target Ebitda of over ₹1,000 per tonne would bring it back into the main league but likely deliver only a mid-single-digit RoE. With rising industry-wide competition from significant capacity additions over FY26–28, ICICI Securities values the stock at 12x FY28E EV/Ebitda, slightly below The Ramco Cements’ 13x multiple. While Ultatech indicates a merger may occur in FY27 or FY28, the timing and merger ratio remain uncertain, typically determined by an independent valuer, the brokerage said.  Disclaimer: Target price and stock outlook has been suggested by ICICI Securities. Views expressed are their own.