Semen Indonesia (SMGR IJ/Maintain) - Top-Line Beat on Volume and Pricing

2Q26 beat at the bottom line, operating results in line. Revenue and PATMI came in at IDR9.4tr (+17.7% YoY, +12.9% QoQ) and IDR148bn (+84.1% QoQ, from a loss in 2Q25), while EBITDA slipped to IDR1.1tr (-0.5% YoY, -2.2% QoQ). 1H26 revenue of IDR17.7tr (49%/48% of MASI/consensus) ran above the five-year run rate range, while EBITDA of IDR2.2tr (48%/45%) stayed within it. 1H26 PATMI of IDR228bn covered 105% of our previous FY26F and 49% of consensus, on lower finance costs and an IDR64bn forex gain.

Sales volume rose 9.4% YoY to 9.56mn tons as domestic bag and bulk grew 11.4% and 19.7% YoY on government programs (Sekolah Rakyat, KDKMP, Kampung Nelayan). Blended ASP gained 11.6% YoY to IDR883k/ton on a richer bag mix and two price increases, with more planned. GPM widened 2.9ppt YoY to 22.7%, but SG&A/ton jumped 28.3% YoY on freight and promotion, leaving EBITDA margin down 2.1ppt YoY at 11.6%. SMGR will also merge eight subsidiaries into a building materials aggregator (IDR250-300tr market).

We revise up FY26F/27F net profit to IDR683bn/IDR884bn (from IDR217bn/IDR334bn) and EBITDA to IDR5.3tr/IDR5.9tr (+14.5%/+20.9%) on the stronger-than-expected results, higher volume and ASP assumptions, and lower interest costs. We maintain our Buy rating but cut TP to IDR2,460 (3.5x 26F EV/EBITDA, 1.25 S.D. below the five-year mean, from 4.4x). Downside risks: lower-than-expected sales volume and blended ASP, and higher-than-expected input costs.