Cement demand is projected to grow by around 8% in FY25, improving from the 6–7 per cent rise seen in Q3. After a subdued first half, demand is gaining momentum across regions, supported by rural recovery and government-led capex. Cement prices have also firmed up. Except for the South, all regions witnessed a 2.5–3.5 per cent hike, with North, West, and Central India leading the trend. The uptick continued into April and is expected to drive better EBITDA per tonne, aided by operating leverage, although YoY EBITDA per tonne may still remain slightly lower. Ultratech Cement is set to benefit from its acquisitions of Kesoram Industries and India Cements, though margins may be tempered due to weaker earnings from the newly integrated entities. JK Cement and Shree Cement are expected to see gains from strong pricing trends in their respective markets. Ambuja Cements is also poised for a recovery after a weak Q3. Mangesh Bhadang of Centrum Broking noted that Dalmia Bharat posted better-than-expected Q4 results, reporting an EBITDA per tonne of Rs 925, despite soft pricing and muted demand in the South. He said companies with lower southern exposure should perform better this quarter. Shree Cement is likely to be a standout performer, with EBITDA per tonne seen close to Rs 1,400, supported by robust volumes and strong margins. Meanwhile, Ramco Cement, heavily exposed to the southern market, struggled with weak demand and higher input costs after an increase in limestone royalties in Tamil Nadu. Although recent price hikes may aid realisations, the demand environment remains uncertain. Based on demand growth, pricing trends, and earnings outlook, Shree Cement and Ambuja Cements are preferred large-cap picks, while JK Lakshmi Cement leads the midcap space, Bhadang said.Image source:azobuild