Buy Shree Cement: target of Rs 27,000: Sharekhan

Sharekhan's research repor on Shree Cement

In Q2FY2021, Shree Cement reported strong operational profitability led by reduction in operating expenses leading to strong beat on operating profit and net profit. Expect 7-8% volume growth for FY2021 excluding April 2021. Demand emanating from rural and semi-urban centers along with a pickup in government led infrastructure demand brightens outlook going ahead. Revisiting its medium to long term capacity expansion plans to reach 57MTPA over three years and 80MTPA over six-seven years.

Outlook

We retain our Buy rating on Shree Cement Limited (Shree Cement) with a revised PT of Rs. 27,000, as we factor in upwardly revised estimates and expect it to report industry leading growth led by rising capacity utlisation.