Shree Cement’s (SRCM) 2QFY26 EBITDA was below our estimate due to higher-than-estimated opex/t. EBITDA (adjusted for one-off) stood at INR8.8b (up 48% YoY; ~9% below our estimates). EBITDA/t at INR1,106 grew 41% YoY (8% below our estimate). OPM expanded 4.4pp YoY to ~20% (vs. estimate ~23%). Adj. PAT grew ~215% YoY to INR2.9b (~36% beat, mainly due to higher other income and lower depreciation than our estimates).
OutlookWe remain watchful of the company’s next leg of capacity expansion (to reach 80mtpa by FY28). The stock trades at a rich valuation of 18x/16x FY27E/FY28E EV/EBITDA. We reiterate our Neutral rating with a revised TP of INR30,030 (based on 18x Sep’27E EV/EBITDA).
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