Shares of Shree Cement declined nearly 4 percent in intraday trade on BSE on August 10, a day after the company released its June quarter scorecard.
The company had released its Q1FY22 results after the market hours on August 9.
The company's Q1FY22 net sales came at Rs 3,449.49 crore, up 48.31 percent from Rs 2,325.79 crore in the corresponding quarter of the previous financial year.
Net profit for the quarter stood at Rs 661.72 crore, up 78.46 percent from Rs 370.80 crore in June 2020.
EBITDA stood at Rs 1,152.68 crore in June 2021 which was up 39.71 percent from Rs 825.04 crore in June 2020.
Shree Cements EPS increased to Rs 183.40 in June 2021 from Rs 102.77 in June 2020.
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The numbers, however, garnered mixed reactions from brokerages.
Global brokerage firm CLSA maintained an underperform call on the stock and cut the target price from Rs 28,850 to Rs 28,300.
"We forecast FY22 volume growth of 12 percent year-on-year (YoY) and EBITDA/tonne of Rs 1,426. Even post the recent weakness, we find valuations expensive," CLSA said.
The stock has gained 18 percent in the calendar year so far against a 14 percent gain in the benchmark index Sensex.
Brokerage firm Motilal Oswal Financial Services has a 'neutral' view on the stock with a target price of Rs 28,550.
"We value the stock at 16 times September 2023E EV/EBITDA and add the value of its UAE operations (USD70/t) to arrive at a target price of Rs 28,550. We assign a neutral rating to the stock as it trades at 18 times FY23E EV/EBITDA, limiting any upside," said Motilal Oswal.
The brokerage firm expects a 13 percent EBITDA CAGR over FY21–23, in line with other largecap peers, on a 13 percent CAGR in cement sales volumes.
On the other hand, ICICI Securities has a buy call on the stock and raised the target price to Rs 32,600 from Rs 31,200.
"We marginally cut our FY22-23E consolidated EBITDA by 1-2 percent, although raise our FY22-23E PAT by 3-10 percent owing to lower depreciation. We increase our target price to Rs 32,600 based on 17 times June 2023E EV/E on quarterly rollover," the brokerage firm said.
Lower demand, lower pricing and regulatory intervention are the key risks for the stock, ICICI Securities pointed out.
Shares of the company traded 3.50 percent down at Rs 27295.85 on BSE at 1130 hours.
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