Sharekhan is bullish on Shree Cement has recommended buy rating on the stock with a target price of Rs 18,660 in its research report dated January 23, 2019.
Sharekhan's research report on Shree Cement
We expect Shree Cement to report a 25% CAGR in net earnings during FY2019-FY2021, backed by increasing utilisation and easing pressure on operating expenses. Shree Cement reported healthy operational performance (EBITDA per tonne up 6% y-o-y) backed by volume (up 11%) and realisation (up 4.5%). However, higher interest, depreciation and lower other income led to the decline in adjusted net earnings. Commissioned 3MT clinker unit and on track to reach 45MT cement capacity by FY2021, which should sustain healthy volume growth going ahead.
We upgrade Shree Cement to Buy with a revised PT of Rs. 18,660, rolling forward our valuation multiple to FY2021.
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