Axis Securities Bullish on 3 Building Materials Stocks: Greenply, Cera, and Astral
Axis Securities recommends buying Greenply Industries, Cera Sanitaryware, and Astral, anticipating strong demand revival in the Indian building products sector driven by increasing disposable income and government initiatives.
Building MaterialsGreenply IndustriesCera SanitarywareAstralReal EstateReal Estate NewsJul 16, 2025
Axis Securities pointed out that the Indian building products sector is poised for a strong demand revival from FY26, aligning with the typical 1.5–2-year lag following a real estate upcycle. Real estate absorptions rose nearly 30 per cent in FY22 and 12% in FY23, with unsold inventory reaching a 10-year low in FY24, indicating building material consumption is gaining momentum.
Further, the brokerage firm highlighted that large-scale government initiatives, such as PMAY (Pradhan Mantri Awas Yojana), Jal Jeevan Mission, and Smart Cities, have spurred demand across segments like tiles, pipes, sanitaryware, and electricals. Infrastructure-linked spending continues to drive early-cycle demand for cement, steel, and pipes, while urban housing schemes are supporting finish material demand with a slight lag.
Increasing disposable income of the middle and upper-middle-class population is another key factor that could augur well for the building products sector. With more disposable income, households are increasingly prioritising upgrades in comfort, aesthetics, and property value through renovations, branded furniture, and lifestyle-driven appliances. Urbanisation, especially across tier-2 and tier-3 cities, is accelerating this trend, supported by industrial setups, job decentralisation, and the emergence of dual-income households.
Demand for branded fittings, designer sanitaryware, vitrified tiles, and luxury bathroom products has surged, with metro cities witnessing two times year-on-year (YoY) growth in smart sanitaryware sales. Premiumisation and a shift towards organised players are also key positives for the sector. India’s building materials industry is undergoing rapid formalisation, propelled by GST implementation, RERA (Real Estate (Regulation and Development) Act), and growing consumer preference for branded, quality-certified products.
Axis Securities has initiated coverage of Greenply Industries with a buy recommendation and a target price of ₹385, offering an upside potential of 26 per cent. The brokerage firm believes Greenply Industries is well-positioned to capitalise on structural shifts and regulatory reforms in the Indian wood panel and interior solutions market. A declining net debt-to-equity ratio further reflects a sound, de-risked balance sheet, reinforcing Greenply’s long-term growth outlook.
The brokerage firm has also initiated coverage of Cera Sanitaryware with a buy recommendation and a target price of ₹8,500, implying an upside potential of 31 per cent. Cera is leveraging premiumisation trends in India’s bathware segment as bathrooms increasingly transform into lifestyle-centric spaces. Growing aspirations are driving demand for stylish, high-tech, and premium-quality products. Its strong positioning in real estate projects—now accounting for 38 per cent of revenue—and a strategic focus on tier-2/3 cities are supporting consistent growth. Targeting ₹2,700 crore in revenue by FY27, the company is investing in innovation, high-margin segments, and capacity expansion to maintain its growth trajectory.
Axis Securities recommends a buy on Astral with a target price of ₹1,680, implying an upside potential of 12 per cent. Astral’s diversified portfolio, cost efficiency, and strategic capex (₹250–300 crore in FY26) position it well for long-term value creation and market leadership.
In conclusion, the building materials sector in India is set for significant growth, driven by a combination of economic, regulatory, and consumer trends. Investors looking to capitalize on this growth should consider the recommendations from Axis Securities.
Frequently Asked Questions
What factors are driving the demand for building materials in India?
Several factors are driving the demand for building materials in India, including rising real estate absorptions, large-scale government initiatives like PMAY and Jal Jeevan Mission, increasing disposable income, and a shift towards premium and branded products.
Why has Axis Securities recommended Greenply Industries?
Axis Securities has recommended Greenply Industries due to its strong position in the Indian wood panel and interior solutions market, a declining net debt-to-equity ratio, and its ability to capitalize on structural shifts and regulatory reforms.
What is the target price for Cera Sanitaryware as per Axis Securities?
Axis Securities has set a target price of ₹8,500 for Cera Sanitaryware, implying an upside potential of 31 per cent.
How is Astral positioned for long-term value creation?
Astral is positioned for long-term value creation through its diversified portfolio, cost efficiency, and strategic capex investments. The company is also focusing on innovation and high-margin segments to maintain its growth trajectory.
What role do government initiatives play in the building materials sector?
Government initiatives such as PMAY, Jal Jeevan Mission, and Smart Cities are crucial in driving demand for building materials. These initiatives are spurring demand across various segments like tiles, pipes, sanitaryware, and electricals, contributing to the sector's growth.
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