Neutral Shree Cement; target of Rs 28000: Motilal Oswal

Neutral

Motilal Oswal's research report on Shree Cement

Shree Cement’s (SRCM) 3QFY26 EBITDA at INR9.2b dipped 3% YoY and was ~9% below our estimate, mainly due to lower-than-estimated volume and realization/t. This was, however, partly offset by lower opex/t. EBITDA/t at INR1,049 declined 4% YoY (est. INR1,077). OPM contracted 1.6pp YoY to ~21%. Adj. PAT grew ~41% YoY to INR3.2b (~7% miss).Management highlighted its strategic shift toward value over volumes since Oct’24 to restore pricing discipline and narrow the realization gap vs. peers, which has helped to reduce the differential to ~INR15/bag vs. INR30/bag.

Outlook

SRCM trades at fair valuations of 17x/15x FY27E/FY28E EV/EBITDA. We reiterate our Neutral rating with a TP of INR28,000, based on 16x FY28E EV/EBITDA.

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