KONTAN.CO.ID – JAKARTA. The performance of PT Semen Indonesia Tbk (SMGR) is projected to remain under pressure in the second quarter of 2026, despite initial signs of improvement in revenue and sales volume.
Harry Su, Managing Director of Research and Digital Production at Samuel Sekuritas Indonesia, highlights that the recovery of the national cement industry is not yet fully robust. This is primarily due to sustained pressure on profitability from rising production costs, particularly in the energy sector.
According to its financial report, SMGR recorded revenue of Rp 8.29 trillion in the first quarter of 2026, marking an 8.3% increase year-on-year (YoY). This growth was largely supported by a 5.4% YoY rise in domestic sales volume and a 2.2% YoY increase in the domestic average selling price (ASP).
However, SMGR’s net profit for Q1 2026 only reached Rp 80 billion. While this represents an 89% YoY increase, the figure still fell short of market expectations. This shortfall is attributed to a high tax burden and escalating production costs, signaling that the cement industry has not yet achieved a complete recovery.
“Certainly, it’s not healthy; net profit will be eroded by lower margin levels. This is a direct consequence of the ongoing energy crisis,” Harry Su explained to Kontan on Monday (May 18, 2026). He added that the outlook for SMGR’s performance in the second quarter of 2026 also remains challenging, with no significant short-term improvement anticipated for the cement sector.
Harry stated, “We do not foresee any potential improvement in Q2 2026 for the cement sector, including SMGR. This consideration stems from the potential for higher costs and demand that has not yet fully recovered.” He further emphasized that the primary challenge for cement issuers originates from the surge in energy costs, particularly the persistently high price of coal.
This pressure is expected to intensify amid a weakening rupiah, rising inflation, and potentially high interest rates, which could collectively suppress public purchasing power.
Conversely, Harry suggests that the market should closely monitor sentiment related to the revision of the coal Work Plan and Budget (RKAB). He believes that “the revision of the coal RKAB returning to normal will weaken coal prices, thereby preventing cement companies’ margins from falling excessively low.”
In terms of stock recommendations, Ivan Reynaldo Sutheja, an analyst at UBS Sekuritas Indonesia, maintains a “neutral” rating for SMGR shares with a target price of Rp 2,700 per share. Meanwhile, Harry Su provides a consensus target price of Rp 3,000 per share.
Summary
PT Semen Indonesia Tbk (SMGR) faces a challenging outlook for the second quarter of 2026 despite reporting an 8.3% year-on-year revenue increase in the first quarter. While domestic sales volume and average selling prices grew, net profit remained below market expectations due to high tax burdens and rising production costs. Analysts warn that the cement industry is not yet fully recovered, as profitability continues to be heavily pressured by the energy crisis and high coal prices.
The company’s performance is expected to remain stagnant throughout the second quarter due to persistent cost pressures, inflation, and a weakening rupiah. Experts suggest that future margin relief may depend on potential revisions to coal work plans that could lower energy costs. Currently, analysts maintain a cautious stance on SMGR shares, with target price projections ranging between Rp 2,700 and Rp 3,000 per share.