Shree Cement Q3 preview: Profit may double with strong volume growth
ICICI Securities expects sharp volume push in North and Eastern region to drive 14.7 percent YoY, 9.8 percent QoQ growth in volumes during the quarter.
January 30, 2021 / 08:59 AM IST
Shree Cement, one of the largest cement companies in India, is likely to report more than 100 percent increase in its profit for the quarter ended December 2020 with strong volume growth on demand improvement post lockdown.
Revenue from operations may grow in the range of 13-16 percent, with 14-15 percent increase in volumes following demand improvement in East, North and Central regions on resumption of infrastructure projects.
"We estimate volume of 7.2 million tonnes (up 15 percent YoY, up 10 percent QoQ) in Q3FY21 on improved demand post the nationwide lockdown. We expect blended realizations to decline by 2.9 percent QoQ (down 2 percent YoY) led by seasonal price correction during the quarter," said Kotak Institutional Equities which expects profit to rise 102 percent and revenue 13.3 percent YoY.
ICICI Securities expects sharp volume push in North and Eastern region to drive 14.7 percent YoY, 9.8 percent QoQ growth in volumes during the quarter. However, "considering the weak pricing in these markets during the quarter, we expect average realisations to decline by 3 percent QoQ," said the brokerage.
At the operating level, EBITDA is likely to increase by 20-25 percent YoY and margin is expected to expand in the range of 100-250 bps YoY, according to brokerages.