Cement Stocks: Nuvama Stays Neutral as Rising Costs Cloud Outlook, JK Cement Top Pick

Cement stocks have been caught between a recovery in demand after the monsoon and a rise in the cost of fuel that could take back the gains from higher prices. The Nuvama view is a useful guide because it separates the sector call, which is neutral, from the stock call, which is positive on JK Cement.

This article on cement stocks explains the demand and price picture, the petcoke cost risk, how JK Cement and its peers are valued, what brokerages have said and what to watch next. It is educational and not a recommendation to buy or sell.

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What Nuvama Says About Cement Stocks

Cement stocks: Nuvama point	Detail from the report summary
Sector stance	Neutral
Demand and prices in October	Improved on post-monsoon activity and government spending
Main risk	Rising petcoke costs could pressure margins in H2 FY27
Top pick	JK Cement, with a Buy rating
Target price for JK Cement	Not found by me in the sources I could read

A neutral rating on cement stocks means the brokerage does not expect the sector to beat the market from here. The picture is that volumes and prices are better but that profit per tonne is at risk if fuel keeps rising. Choosing JK Cement as the top pick signals that Nuvama sees it as better placed than peers within that cautious view. Because I could not read the note, the reasons for that pick are not confirmed here.

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October Demand and Prices: The Positive Side for Cement Stocks

After the monsoon, construction work picks up and government projects speed up, which lifts cement demand. The report summary says demand and prices improved in October for this reason. Better pricing is the key driver of profit per tonne, which is why the movement in prices matters more to cement stocks than the volume growth alone.

Earlier this year the picture was weaker. A Nuvama note from May 2026 said demand was sluggish in most regions because of labour shortages and unfavourable weather, and that planned price hikes were mostly not implemented. So the October improvement is a change from a weak spring, and cement stocks have not had many quarters of clear pricing strength.

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Risk: If the October price gains do not hold through November and December, the second half could disappoint even with good volumes.

Petcoke Costs: The Risk for Cement Stocks

Cement stocks: cost point	Detail
Petcoke price in May 2026	About $151 a tonne, up about $25 a tonne from the previous quarter, per Nuvama
Packaging	Costs were also rising in May
Timing of the hit	Nuvama then expected fuel costs to show from late Q1 FY27 or Q2 FY27
Current worry	Rising petcoke costs could pressure H2 FY27 margins
Other reports	US petcoke prices and high freight are reported to squeeze Indian cement fuel economics

Petcoke is a major fuel for cement kilns, so a rise in its price lifts costs directly. UltraTech's Q2 FY27 results showed raw material costs up 24% and EBITDA per tonne of Rs 974, and Elara warned of second-half cost pressure from higher fuel prices amid the West Asia crisis. With crude above $100, energy costs are a live risk for cement stocks, and any price hike has to be big enough to offset them.

JK Cement Share Price and Valuation

Cement stocks: JK Cement point	Level on 22 Oct 2026
Previous close	Rs 4,966.50
Day high	Rs 4,920.50
Day low	Rs 4,820.00
Price at 3:45 PM	Rs 4,858.50, down 2.17%
Market capitalisation	About Rs 37,500 crore at today's price (my calculation)
Trailing EPS	Rs 121.44
P/E at the previous close	40.86 times
P/E at Rs 4,858.50	About 40.0 times (my calculation)
Book value per share	Rs 910.76
Price to book at Rs 4,858.50	About 5.3 times (my calculation)
Return on equity	14.10%
Debt to equity	0.88
Dividend yield	0.40%
Industry P/E	29.06 times

JK Cement never rose above Rs 4,920.50 and fell as low as Rs 4,820, which is a weak day even for the market. At about 40 times earnings it trades well above the industry multiple of 29 (my calculation), and a return on equity of 14.10% is respectable but not high enough alone to justify that gap. The case for JK Cement among cement stocks therefore rests on profit growth, not on a low price.

In Q1 FY27 JK Cement had revenue of about Rs 4,030 crore, up 20%, and volume up 18%, but EBITDA fell about 6% to Rs 650 crore and profit fell about 14% to Rs 280 crore (figures as reported, rounded). EBITDA per tonne was about Rs 979, down about 20%. So the company is growing volume but not yet profit, and the second half needs to show margin recovery.

How Peers Compare Among Cement Stocks

Cement stocks: company	Price on 22 Oct 2026	P/E	Price to book	Return on equity	Dividend yield
JK Cement	Rs 4,858.50	About 40	About 5.3	14.10%	0.40%
JK Lakshmi Cement	Rs 484.65, up 0.69%	16.17	1.54	10.60%	1.35%
UltraTech Cement	Rs 10,937 at 1:19 PM	About 36.5	About 4.4	10.66%	2.22%

Among these cement stocks, JK Lakshmi Cement is the lowest valued at about 16 times earnings, while JK Cement carries the highest multiple. A high multiple means the market already expects growth, so JK Cement can disappoint if margins do not recover. The numbers show that being the top pick of one brokerage does not make a stock inexpensive.

UltraTech's Q2 FY27 profit rose 21.3% to Rs 1,493.77 crore and volume grew 13.8%, with capacity utilisation at 71%. That shows the demand side of cement stocks is healthy, which supports the Nuvama view on October, while the margin side stays under watch.

What Brokerages Said on JK Cement Earlier

Cement stocks: brokerage view on JK Cement (July 2026)	Rating	Target price	Gap to Rs 4,858.50 (my calculation)
Nuvama	Buy	Rs 7,034	About 45% above
Motilal Oswal	Buy	Rs 6,430	About 32% above
JM Financial	Add	Rs 6,250	About 29% above
Elara Capital	Accumulate	Rs 5,815	About 20% above

These ratings and targets were reported in July 2026, before the Q2 results and before the October note, so they may have changed and I could not confirm the current numbers. The gap between them and today's price is large, which suggests either that the stock has fallen since July or that targets were set optimistically. Treat them as history and look for the latest target price before acting. A target is an opinion and not a promise.

Should You Buy Cement Stocks Now?

Cement stocks: investor type (my reading)	Points to weigh
Long-term investor	Infrastructure spending supports demand, but valuations and fuel costs mean cement stocks should be bought in stages
New buyer	Waiting for Q3 EBITDA per tonne and the Nuvama target gives more evidence than a call alone
Short-term trader	JK Cement's Rs 4,820 day low and Rs 4,920.50 day high are the near-term reference

This is an educational view and not advice. A neutral sector view from a brokerage with one top pick says to be selective, and the high P/E of JK Cement means it needs good results to hold its price.

What to Watch Next on Cement Stocks

1. Cement price trends through November and December, which drive cement stocks
2. Petcoke and freight costs against the price rises the industry can pass on
3. Q3 FY27 EBITDA per tonne for JK Cement, UltraTech and peers
4. The full Nuvama note, including any target price for JK Cement
5. Government spending on infrastructure and housing demand

Conclusion

Cement stocks show improving demand and prices in October but face fuel cost pressure in H2 FY27, which is why Nuvama stays neutral while naming JK Cement a top pick with a Buy. JK Cement fell 2.17% to Rs 4,858.50 and trades near 40 times earnings, so margin recovery is the key test. Read the filings and decide on your own horizon.

Frequently Asked Questions

What does Nuvama say about cement stocks?

Ans. Nuvama stays neutral on the sector. Demand and prices improved in October on post-monsoon activity and government spending, but rising petcoke costs could pressure margins in H2 FY27. JK Cement is its top pick with a Buy.

Why is JK Cement the top pick among cement stocks?

Ans. Nuvama names it the top pick with a Buy, but I could not read the note, so the exact reasons and target price are not confirmed. In the earlier July notes, Nuvama had a target of Rs 7,034 for JK Cement.

What is the JK Cement share price today?

Ans. JK Cement traded at Rs 4,858.50 at 3:45 PM IST on 22 Oct 2026, down 2.17% from Rs 4,966.50. The day range was Rs 4,820 to Rs 4,920.50.

Is JK Cement expensive compared with other cement stocks?

Ans. Its P/E is about 40 times by my calculation, against an industry P/E of 29.06 and JK Lakshmi Cement at about 16. Its return on equity is 14.10% and its price to book is about 5.3.

How do petcoke costs affect cement stocks?

Ans. Petcoke is a major kiln fuel, so higher prices raise cost per tonne and cut margins unless cement prices rise by more. Nuvama noted petcoke near $151 a tonne in May, up about $25 a tonne from the previous quarter.

Is cement demand improving?

Ans. The report summary says demand and prices improved in October, helped by post-monsoon activity and government spending. UltraTech's Q2 grey cement volume rose 13.8% with utilisation at 71%.

What are the risks to cement stocks?

Ans. Rising fuel and freight costs, price hikes that do not hold, weak housing demand and high valuations are the main risks. JK Cement's EBITDA per tonne fell about 20% in Q1 FY27, which shows margin risk.

Is this article investment advice?

Ans. No. It is educational and not a recommendation to buy or sell. Please check the figures against company filings and your own risk profile before you act on anything you read here.