Sharekhan's research report on Shree Cement
In Q1FY2024, standalone operational performance met estimates while net profit beat was led by lower than estimated depreciation. Management remains optimistic on the near as well as long-term demand environment leading to accelerated capacity addition plans of 12 MTPA by FY2025 end at a capex of Rs. 7000 crore. It ventures into the RMC business too. Income Tax survey followed by the Ministry of Corporate Affairs notice remains a key hangover on the stock.
Outlook
We upgrade Shree Cement to Hold with a revised PT of Rs. 26,400, assigning a higher valuation multiple in-line with the industry major. Valuation premium vis-à-vis key peers has narrowed down as per our expectations.
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