Edelweiss is bullish on Shree Cements has recommended buy rating on the stock with a target price of Rs 21140 in its research report dated May 16, 2017.
Edelweiss' research report on Shree Cements
Shree Cement’s (SRCM) Q4FY17 numbers may appear to be disappointing especially with freight cost surging which weighed on EBITDA/t. Freight & forward costs/t jumped 32% YoY due to expanding Eastern operations, longer lead-distance due to temporary plant shut down in Bihar, lower ex-factory sales and rising diesel costs.
However, the stock price may witness some pressure in near term, but we remain convinced about SRCM’s cash generating abilities. Also, on P/CF basis, the implied multiple of 21x seems reasonable versus large peers. Maintain ‘BUY’ with a target price of INR 21,140.
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