INTP
Contact our analyst Eka
BUY, 12.5% Upside
12th August 2025
Price Rp 6,650
Target price Rp 7,600
12th August 2025
Price Rp 6,650
Target price Rp 7,600
Flattish Volume Growth Expected in 2025
- Domestic cement demand fell -3.1% YoY to 27.16 million tons in 1H-2025, reflecting a weak economic environment, soft purchasing power, and slower infrastructure activity.
- Bulk cement demand contracted -10.2% YoY, with Java down -3.4% due to reduced infrastructure spending, and demand outside Java down -22.2%, mainly from weaker volumes in Kalimantan as new capital city (IKN) construction normalized.
- Bag cement volumes were flat overall, with Java demand down -3.4% YoY but outside Java up +3.2% YoY. Indocement’s total sales volume fell -1.6% YoY to 8.89 million tons, with bag cement still growing +0.8% YoY and bulk cement down -11% YoY. Bag cement growth outside Java (+9.5% YoY) offset weakness in Java (-5.5% YoY), as INTP maintained pricing discipline while some competitors offered discounts. INTP’s market share held steady at 29.5%, and bag cement’s share of sales rose from 70% to 72% in 1H-2025.
- Management expects overall 2025 volumes to be flattish, with improvement in 2H-2025 driven by resumed infrastructure spending and the gradual restart of the IKN project.
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Q2 2025 Results: Margin Expansion Sustained
Valuation:
- INTP delivered strong margin improvement in Q2-2025, supported by:
- Better selling prices offsetting lower volumes
- Higher industrial efficiency
- Increased financial income
- Net profit surged +44.4% YoY and +34.8% QoQ to IDR 284.1 billion, lifting the net profit margin to 7.0% from 4.9% in Q2-2024. Gross profit rose +9.3% YoY and +9.2% QoQ to IDR 1.22 trillion, improving the gross profit margin to 30.1%.
- Cost of revenue fell -3% YoY and -0.7% QoQ, supported by:
- Lower raw material costs (-17.9% YoY, -20% QoQ)
- Lower fuel and power costs (-3.1% YoY, -6.0% QoQ)
- Lower direct labor costs (-2.7% YoY)The
- Grobogan plant in Central Java also helped reduce delivery, loading, and transportation costs by -2.8% YoY in Q2-2025.
- INTP’s margin improvement outperformed peers.
Valuation:
- We maintain a BUY recommendation with a target price of IDR 7,600, implying a 12.5% upside, based on a 2026F P/E of 15.5x.
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