Union Budget: Cement stocks fall on ‘modest’ capital spending hike in budget

Indian cement companies’ shares fell in a special trading session on Saturday after the government announced a ‘modest’ spending hike for infrastructure projects in the annual budget, which failed to impress investors.

UltraTech Cement’s shares dropped 2.7%, while those of rival Adani Group’s cement firms Ambuja and ACC slumped 4.5% and 2.3% respectively.

Other big cement firms – Shree and Dalmia Bharat – declined 3% and 2% respectively.

The Indian government said it will spend a record 11.21 trillion rupees ($129.54 billion) on infrastructure in the upcoming financial year that begins on April 1, but the increase in planned spending disappointed markets.

“The capex outlay for fiscal year 2026.. looks modest compared to raises made in FY25 and FY24 budget, and misses market expectations slightly,” said Amit Anwani, research analyst at Prabhudas Lilladher.

Cement, a key construction material, is a direct beneficiary of government’s capital spending. India’s infrastructure index reversed gains following the budget announcement, and was last down 1.5%.