Buy Shree Cement; target of Rs 28,800: Sharekhan

Sharekhan's research report on Shree Cement

Standalone revenues stayed in-line as it preferred value over volume push in Q2FY2025. EBITDA/tonne beat estimates majorly owing to lower than estimated power & fuel costs. Management retained its earlier guidance of growing its volumes at par with industry growth rate over the next two years. We expect cement prices to improve with positive demand in H2FY2025. Capacity expansion plans remain on track to achieve more than 80 mtpa capacity by 2028. Capex of Rs. 4000 per annum stay intact.

Outlook

We retain a Buy rating on Shree Cement with a revised PT of Rs. 28,800, factoring a marginal downward revision in operational profitability led by lower volume growth than earlier envisaged.