Motilal Oswal Financial Services has maintained a sell rating on India Cements, assigning a target price of ₹370, citing limited upside from current levels and valuation comfort already built into the stock price. The brokerage believes recent operational improvements are largely reflected in the market valuation, reducing scope for further re-rating in the near to medium term.

Key Highlights

• Motilal Oswal cautious on India Cements, sees limited upside
• India Cements stock price growth capped, says Motilal Oswal

In its latest research note, Motilal Oswal highlighted that India Cements reported a better-than-expected Q3 results performance, supported by higher cement volumes and tighter cost control. The company posted EBITDA of around ₹795 million during the quarter, compared with an operating loss in the corresponding period last year. Lower fuel costs and improved capacity utilisation contributed to the earnings recovery.

Despite the improvement, the brokerage remains cautious on the stock’s risk-reward profile. It noted that competitive intensity in the cement sector continues to weigh on pricing power, while freight and energy costs remain key variables. Motilal Oswal also pointed out that sustained margin expansion could be challenging amid capacity additions by peers and regional supply pressure.

The target price of ₹370 is derived using a valuation multiple of 14x EV/EBITDA on FY28 estimates. According to the brokerage, this valuation appropriately factors in expected earnings recovery and balance sheet improvement, but leaves limited headroom for upside from prevailing market prices. As a result, it sees downside risk if volumes or pricing fail to meet expectations.

The report added that while management initiatives to improve efficiency and optimise costs are visible, broader industry outlook conditions will play a decisive role in future performance. Cement demand growth, infrastructure spending trends, and cost volatility will remain key monitorables.

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Motilal Oswal advised investors to remain cautious and consider booking profits or avoiding fresh exposure at current levels, given the stock’s run-up and capped return potential.