Morgan Stanley and Motilal Oswal recommend Ambuja Cement and UltraTech Cement as top picks, citing compelling reasons.

Motilal Oswal is bullish on the cement sector, predicting strong volume growth and improved realizations in the second half of FY2025. The brokerage expects an 8% YoY volume growth, with a 1% sequential increase in realizations and a 5% YoY decline. EBITDA per tonne is projected to rise 23% sequentially due to better realizations, operating leverage, and cost-efficiency measures. The brokerage also anticipates an improvement in clinker utilization, which will support pricing power. Additionally, sustained price hikes and improved utilization could lead to positive earnings surprises in FY2026 and FY2027. Motilal Oswal favors companies with a strong presence in the North, Central, and West regions, naming UltraTech Cement as its top pick, with Ambuja Cements and JK Cement also seen as strong contenders.