BUY, 72% Upside

10th June 2026

Price Rp 4,000

Target price Rp 6,880

Investment Consideration

Domestic Demand Recovery Accelerates in April 2026

• Indonesia’s cement industry showed a stronger recovery in April 2026, with domestic cement demand increasing 35.0% YoY to 5.29 million tons, supported by improved construction activity during the dry season. Growth was broad-based across product segments, with bulk cement demand rising 48.5% YoY and bag cement demand increasing 30.4% YoY. As a result, domestic cement demand in 4M26 reached 19.06 million tons, up 11.6% YoY, driven by a 12.4% YoY increase in bag cement demand and a 9.6% YoY increase in bulk cement demand.
• INTP also recorded a strong recovery in April 2026, with total cement sales volume increasing 34.7% YoY to 1.48 million tons. Growth was mainly driven by bulk cement sales, which rose 46.2% YoY, alongside a 31.1% YoY increase in bag cement sales. On a 4M26 basis, total sales volume increased 5.5% YoY to 5.34 million tons, while market share remained broadly stable at around 28%.
• In 1Q26, domestic cement demand increased 4.6% YoY to 13.7 million tons despite softer demand in Java. Demand in Java declined 0.8% YoY to 6.79 million tons, reducing its contribution to national demand to 49% from 51% previously. Meanwhile, demand outside Java increased 8.6% YoY to 6.98 million tons, supported by an 11.6% YoY increase in bag cement demand. Although bulk cement demand outside Java declined 3.4% YoY, largely due to lower construction activity related to the IKN project, overall demand remained resilient.
• INTP’s domestic sales volume declined 2.3% YoY to 4.19 million tons in 1Q26, partly due to seasonal factors related to Ramadan and Lebaran. However, export sales surged 239% YoY to 252 thousand tons, helping to partially offset softer domestic demand.
• Looking ahead, management remains cautiously optimistic on the industry outlook, supported by infrastructure-related demand from toll road projects, MRT and LRT development, as well as coastal and sea wall projects. Management currently targets sales volume growth of around 1% YoY in 2026. Key risks remain weak private-sector purchasing power, elevated energy costs, and regulatory uncertainty related to the coal Domestic Market Obligation (DMO) policy.

Q1 2026 Results: Margins Remain resilient

• INTP reported revenue of IDR 3.88 trillion in 1Q26, declining 3.3% YoY and 20.2% QoQ due to lower sales volumes during the quarter. Despite softer top-line performance, profitability remained resilient as gradual average selling price (ASP) adjustments helped offset higher fuel costs and Rupiah depreciation.
• Net profit increased 2.1% YoY to IDR 215 billion, resulting in a higher net profit margin of 5.6% compared with 5.3% in 1Q25. Gross profit declined slightly by 1.7% YoY to IDR 1.10 trillion, while gross margin remained broadly stable at 28.2%.
• Cost of revenue declined 3.9% YoY, supported by lower raw material costs (-13.1% YoY) and lower fuel and power expenses (-2.1% YoY). However, logistics and distribution costs remained elevated due to higher fuel prices. Overall, INTP continued to maintain profitability above industry averages, reflecting disciplined pricing strategies and effective cost management.
• In addition, INTP established a joint venture with Mondi Industrial Bag GmbH under a 60:40 ownership structure to strengthen its packaging ecosystem, improve product quality, and support long-term operational efficiency.
• Going forward, we expect INTP to continue balancing selective ASP increases with cost-efficiency initiatives to sustain profitability. The company is also well positioned to benefit from a gradual recovery in domestic cement demand while maintaining its strong market position and balance sheet strength.

Valuation: Maintain BUY TP 6,880

• We maintain our BUY recommendation on INTP with a target price of IDR 6,880, implying 72% upside potential. Our valuation is based on a 2027F P/E multiple of 10.0x. While industry demand recovery remains gradual, we believe INTP’s strong balance sheet, resilient margin profile, disciplined pricing strategy, and ongoing cost-efficiency initiatives will support earnings resilience and position the company to benefit from a broader industry recovery in 2026..