Motilal Oswal has a Buy with a Rs 530 target — 24% upside from Rs 426. The valuation anchor is 16x FY28E EV/EBITDA, which the brokerage considers conservative given the earnings recovery trajectory. Adani Group's infrastructure ambitions — scaling capex from Rs 1.53 trillion to potentially Rs 10 trillion by FY30 — provide a powerful demand tailwind for cement over a multi-year horizon. India's infrastructure gap (spending Rs 17t vs. a Rs 70t requirement) is the structural engine.

The near-term caution: FY27 is a transitional year. EBITDA/tonne dips to Rs 856 before recovering sharply to Rs 1,053 in FY28. Margins compress to 15.1% in FY27 before rebounding to 18.3%. The company also moves into net debt over this period as heavy capex kicks in.

Capex to outpace cash generation — near-term debt build

Capital expenditure is forecast to remain elevated at Rs 64 billion in FY27 and Rs 88 billion in FY28, significantly exceeding free cash flow generation in both years. This will push the company from its current net cash position of Rs 9.1 billion (FY26) into a net debt position — Rs 7.9 billion by FY27 and Rs 22.9 billion by FY28. While the balance sheet remains manageable, the shift underscores that near-term investment in capacity expansion will weigh on financial flexibility. The brokerage estimates revenue, EBITDA, and PAT CAGRs of approximately 11%, 18%, and 19% respectively over FY26–28, driven by volume growth of ~9% and a modest ~2% improvement in realizations.

Key risks to watch

Near-term headwinds include sustained cost pressures from energy and logistics, subdued cement price hikes across the industry, and high lead distances stemming from the geographic concentration of limestone deposits. Capacity utilization is projected to dip to 66–67% in FY27–28 as new capacity comes on stream. Any significant slowdown in government infrastructure spending or demand disruption in housing could also impair volume growth assumptions. On the upside, a faster-than-expected recovery in pricing or an accelerated reduction in lead distances could provide material positive surprise to earnings.

Levels for investors

Motilal Oswal's technical and fundamental analysis suggests the stock is trading near a favorable entry zone. The 52-week low of Rs 394 constitutes near-term support. A decisive close above Rs 450 would signal renewed upward momentum toward the analyst's target of Rs 530. Long-term investors may consider accumulating in the Rs 400–420 band, using any decline toward Rs 390 as a stronger loading opportunity. The target of Rs 530, derived at 16x FY28E EV/EBITDA, implies a 12-month return of approximately 24% from current levels. The stock's current EV/tonne of approximately USD 95–105 compares favorably against its long-run average of USD 144 and historical peak of USD 237, suggesting structural undervaluation in the context of India's long-dated infrastructure supercycle.