Volume recovery remains relatively fragile despite the monthly improvement. National cement sales in Jul-25 stood at 5.8 million tons (+18.4% MoM; -3.8% YoY), bringing cumulative 7M25 volumes to 32.9 million tons (-3.2% YoY) or 51.5% of our FY25E. Bulk cement was the main driver in July with sales of 1.70 million tons (+21.7% MoM; -10.8% YoY), while bagged cement recorded 4.09 million tons (+17.1% MoM; -0.5% YoY). Cumulatively, bagged cement sales remained stable at 13.56 million tons as of 7M25, whereas bulk cement contracted by 10.2% YoY to 7.60 million tons, mainly affected by the delayed execution of IKN project developments. From a regional perspective, all areas posted a rebound in July (Table 1), although cumulatively, Jakarta (1.16m tons, -17.2% YoY), Kalimantan (2.45m tons, -18.8% YoY), and Yogyakarta (519k tons, -10.4% YoY) still booked contractions.

Both major players successfully increased market share in Jul-25. INTP recorded cement sales of 1.69 million tons (+20.5% MoM; +17.1% YoY), with market share rising to 29.2% (vs. 28.7% in Jun-25), bringing cumulative 7M25 sales to 8.0 million tons (-2.8% YoY). SMGR booked cement sales of 2.80 million tons (+20.8% MoM; -16.9% YoY), bringing cumulative 7M25 volumes to 12.93 million tons (-7.7% YoY), with July market share improving to 48.25% (vs. 47.32% in Jun-25). On a monthly basis, INTP and SMGR expanded their market shares by +50bps and +93bps, respectively. However, cumulatively, SMGR’s sales performance contracted more significantly, while INTP demonstrated relative resilience, with declines of -7.7% YoY vs. -2.8% YoY, respectively.

The rebound in Jul-25 provides an early indication of improving demand, in line with the seasonal trend in the second half of the year. As highlighted in our previous report, we expect sector performance to improve in 3Q25–4Q25, supported by the historical trend over the past four years where sales contribution during these quarters remained stable at around 27–28% of full-year volumes. Additional factors such as fewer national holidays in 2H25 and higher government spending in the second half are expected to act as catalysts. Moreover, we continue to monitor the realization of government programs that are projected to support cement demand going forward.

We maintain our Neutral rating on the cement sector, given the still fragile volume recovery despite sequential improvement. The bagged segment remains stagnant amid weak consumer purchasing power, while the bulk segment continues to contract, leading to a cumulative national volume decline of -3.2% YoY as of 7M25. At the company level, we downgrade INTP from BUY to HOLD with a target price of Rp6,500, as the target has already been achieved, implying EV/EBITDA valuations of 5.33x (FY25E) and 4.70x (FY26F). Upside risks include: (1) faster and larger-than-expected government spending, (2) stronger-than-expected recovery in bulk demand, and (3) stabilization of energy prices supporting profitability.

By PHINTRACO SEKURITAS | Research
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