Shares of Indian cement companies are in focus on Friday, August 29, after sources told CNBC-TV18 that the Centre has proposed reducing goods and services tax (GST) on cement from 28% to 18%.
Brokerages estimate the tax cut could lead to a 7-8% reduction in cement prices, making premium cement more affordable.
Analysts believe this could push premium cement's market share to 55-60% by FY30, up from the current 40%.
Key beneficiaries of the move are expected to include UltraTech Cement, Shree Cement, Dalmia Bharat, and Ambuja Cements.
Jyoti Gupta, Research Analyst at Nirmal Bang Institutional Equities, said the impact on cement may take time.
"When you're reducing it from 28% to 18%, it will
have some impact on the operating incomes of the company, and that could be offset by an increase in demand in a later part of the year,” she said. Gupta added that cement demand in India does not always respond quickly to price changes, and the effect may only be visible in later years.
It needs to be noted that all of these are just proposals and that the final decision will be taken by the GST Council, during its meeting on September 3 and 4, 2025.
