Buy Shree Cement; target of Rs 35,330: ICICI Securities

ICICI Securities research report on Shree Cement

Keeping up with its ‘industry-superior’ performance trend, Shree Cement (SRCM) reported a fabulous Q4FY25. Adjusted EBITDA/t stood at a whooping INR 1,459, surging 35% QoQ (reported being INR 1,404) being 7% ahead of our estimate. While volumes (up 3% YoY) stood in line, the ~5% QoQ realisation surge did the job for SRCM, even as costs disappointed marginally. With scope of further cost rationalisation (focus to increase share of railway freight), on track capex projects and a strong balance sheet (net cash of ~INR 54bn), we continue to repose our faith in SRCM.

Outlook

We keep our EBITDA for FY26E largely unchanged and introduce FY27E assuming 13% growth. Factoring in the improving cement price outlook (across regions), we now value SRCM at 19x EV/EBITDA (18x earlier) and rolling over valuation to FY27E, maintain BUY with a revised TP of INR 35,330 (vs INR 30,170 earlier).