Cement (Neutral/Maintain) - Raising FY26F on a Strong 9M26

Domestic cement consumption came in at 6.0mn tons in September 2026 (+0.1% MoM, +3.0% YoY), led by bulk at 1.9mn tons (+3.9% MoM, +8.2% YoY), up in and outside Java on dry weather, project deadlines, and faster year-end budget disbursement. Bag eased to 4.2mn tons (-1.5% MoM, +0.8% YoY). 9M26 consumption rose 7.9% YoY to 48.1mn tons, or 75.6% of our previous FY26F, above the 71-74% five-year run rate. As second-tier players ran ahead of our projection, we raise FY26F to 66.9mn tons from 63.7mn tons and keep FY27F growth at 2.0%.

SMGR group volume fell to 3.0mn tons in September (-7.7% MoM, -12.3% YoY) as regional volume dropped 39.3% YoY, and its domestic share slipped to 44.0% (-4.3ppt YoY), the lowest since at least 2021. INTP volume rose to 1.9mn tons (+1.9% MoM, +12.1% YoY), lifting its market share to 31.6% (+2.6ppt YoY), the highest since at least 2021. In 9M26, SMGR volume grew 1.5% YoY to 27.9mn tons (71.4% of FY26F vs. historical 72-75%), while INTP grew 7.8% YoY to 14.1mn tons (72.9% vs. 72-73%).

We keep Neutral on the sector, Buy on SMGR (TP IDR2,460), and Trading Buy on INTP (TP IDR6,500). INTP's sharp sell-off after MSCI's consultation on reclassifying Indonesia as a Standalone Market leaves 19.3% upside to our TP, just short of a Buy. Downside risks are a higher BI Rate, slower state spending, a weaker rupiah, and more foreign selling, while upside risks are firmer demand, first-tier share gains, and better pricing.