Semen Indonesia (SMGR) Poised to Win Government Projects as 2026 Profit Could Rise
Maybank Sekuritas Indonesia analyst Kevin Halim says Semen Indonesia Tbk (SMGR) is set to be stronger in 2026, with two main drivers likely to boost its performance. He notes the company as a top pick given its status as a state-controlled enterprise (BUMN) and its wide operational reach across Indonesia, which makes it a key beneficiary of large-scale government projects.
Kevin says SMGR is undertaking operational improvements, including reducing its subsidiaries and strengthening its balance sheet. Although fourth-quarter 2025 net income is expected to be affected by one-off impairments, the move is viewed as a positive reset that supports a cleaner corporate structure ahead of 2026 and reinforces financial discipline.
“Even if Q4 2025 is affected by impairment, this is a positive step to fortify SMGR’s structure and efficiency,” Kevin said in a research note dated 5 March 2026.
In addition, the company has recorded profitability at its main subsidiaries such as SILOG (logistics) and SII (exports) through tighter budget controls and efficiency measures. SMGR’s balance sheet is also strengthened by adjustments to receivables provisioning and goodwill impairment. Most of the restructuring costs will be recognised in Q4 2025, with a smaller impact in 2026.
Through January 2026, SMGR reported strong volume growth. This is reflected in a 14% year-on-year rise in sales, supported by solid demand in Sumatra and East Java. “Momentum is expected to ease in February–March 2026 due to holidays, including Chinese New Year and Eid al-Fitr,” Kevin said in the research.
Maybank Sekuritas Indonesia sees the risk of a significant volume rise in Q2 to Q4 2026, driven by post-flood reconstruction in Sumatra and the Koperasi Desa Merah Putih (KDMP) programme.
Data show flood-damaged homes in Sumatra reaching 301,000 units by end-February 2026. The government has allocated around Rp 56 trillion for reconstruction from April 2026 to December 2028, which could be a multi-year driver for cement industry volumes.
Kevin estimates the reconstruction’s contribution to cement industry volumes in 2026 at 3%–5%, assuming 5%–10% of the budget is used for cement-related expenditures. The KDMP programme is expected to add 2%–4% volume growth through the creation of about 80,000 cooperatives.
Kevin highlights the risk from a weak rupiah, as around 50% of SMGR’s costs are denominated in foreign currencies. However, energy costs are considered relatively secure because the company uses 100% coal under the Domestic Market Obligation (DMO) mechanism.
By the end of 2025, SMGR is forecast to record revenue of Rp 35.23 trillion and net profit of Rp 308 billion. For 2026, it is expected to post revenue of Rp 36.99 trillion and net profit of Rp 816 billion.
Kevin recommends buying SMGR shares with a 12-month target of Rp 4,500 per share. On Friday (6 March 2026), SMGR shares fell 0.37% to Rp 2,660 per share.