Sharekhan's research report on Shree Cement
In Q4FY2023, standalone operational performance met estimates while net profit beat was led by tax reversals related to prior periods. Management expects 13% y-o-y rise in sales volumes in FY2024 as strong demand sustains and new capacity is added. Power & fuel costs are expected to tread lower q-o-q during H1FY2024. Company’s 9.5-mtpa cement capacity addition plan by Q2FY2025 remain intact while it remains committed to reach 80 mtpa by 2030. Focus on premiumization, capacity additions and cost efficiencies stays.
Outlook
We retain a Reduce on Shree Cement with a revised PT of Rs. 23,000, assigning a higher valuation multiple in-line with industry majors. We expect valuation premium vis-à-vis key peers to narrow down.
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