Conviction buys: UltraTech, Dalmia Bharat and JK Cement offer up to 14% returns. Axis Direct explains why

Brokerage firm Axis Direct has picked three cement stocks with potential to deliver up to 14% gains. The recommendations follow strong Q3 earnings by UltraTech Cement, Dalmia Bharat and JK Cement. Uttam Kumar Srimal explains why these stocks are his top conviction ideas.

UltraTech Cement | Upside: 8%

With 10% returns in the past 3 months, UltraTech Cement shares have outperformed Nifty (2%). Axis Direct considers it a conviction buy with a target of Rs 14,000, implying an 8% upside. The company will benefit from the growing market share of large cement companies, increasing from 55% to 65%-70% by FY27-28. With expanded capacity and scale, the company is positioned to strengthen its market leadership from 25% to 28%.

Dalmia Bharat | Upside: 14%

With 9% gains in the past three months, Dalmia Bharat is another conviction buy for this brokerage in the cement sector. The target price is Rs 2,520. Q3 was aided by a 9% YoY increase in volume, reaching 7.3 mtpa. Cement prices are expected to improve in Q4 driven by better demand. Dalmia is also actively pursuing cost-saving initiatives, targeting a reduction of Rs 150–200/tonne over the next two years. EBITDA margins are projected to be in the range of 21-22% over FY26-27E.

JK Cement | Upside: 12%

Buy the stock for a target of Rs 6,570, implying a 12% upside. It has delivered 4% returns in the past three months. Post expansion, Central India will account for 40% of JK Cement’s grey capacity, while entry into the Eastern region strengthens its long-term growth footprint. Supported by rising infrastructure-led demand, the company is well placed to capture higher cement consumption, underpinning a 14% revenue CAGR over FY25–FY28E.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)