Accumulate Shree Cements; target of Rs 9668: Kotak Sec

Kotak Securities research report on Shree Cements“Shree Cements, revenues during Q1FY15 were marginally ahead of our estimates led by improvement in cement volumes. Operating margin performance was led by improvement in cement realizations and margins stood at 21% for Q1FY15 as against 20% during same period last year. Net profits for the quarter were impacted by higher depreciation charges but were boosted by tax writeback for the quarter. At current market price of Rs 9200, stock is trading at 19x and 14.1x P/ CEPS and 17x and 11.9x EV/EBITDA for FY15 and FY16 respectively. We revise our estimates to factor in demand and pricing improvement in key markets of the company and arrive at a revised price target of Rs 9668.” “We continue to remain positive on the company and maintain ACCUMULATE rating on the stock as we believe that company is likely to benefit from volume expansion from its plants as well as cement pricing improvement going forward. We recommend investors to buy the stock on declines,” says Kotak Securities research report.   

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