Shree Cement is expected to report strong earnings in July-September quarter on account of high volumes, realisations and lower operating cost. Profit is seen rising 181 percent year-on-year to Rs 362 crore and revenue may grow 18 percent to Rs 2,040 crore in Q2, according to average of estimates of analysts polled by CNBC-TV18.
The bottomline is likely to be driven by higher EBITDA & other income (VAT incentives) and lower depreciation while topline may be aided by higher volumes and realisations.
Analysts expect sales volumes to grow 10 percent at 4.64 million tonnes and realisations to increase 7-8 percent YoY due to better pricing in north India.
Operating profit during the quarter may jump 52 percent to Rs 593 crore and margin may expand 650 basis points to 29.1 percent on yearly basis, led by lower operating cost and higher sales volumes.
Shree Cement uses 100 percent petcoke in the kiln and coke prices are sharply lower YoY (though spiked QoQ).
Key issues to watch out for would be volume and pricing recovery for north India; update on scale-up of recently commissioned Chhattisgarh units; new expansion plan and cement EBITDA per tonne.
Analysts expect cement EBITDA per tonne of approximately Rs 1225 per tonne in Q2FY17 against Rs 1,313/tonne in Q1FY17 (the highest since FY11) and Rs 768/tonne in Q4FY16.
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