Neutral Shree Cement; target of Rs 23,710: Motilal Oswal

Motilal Oswal recommended Neutral rating on Shree Cement with a target price of Rs 23,710 in its research report dated May 23, 2023.

Broker Research

May 25, 2023 / 07:40 IST

neutral

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on Shree Cement

Shree Cement (SRCM)’s 4QFY23 earnings were below our estimate due to lower-than-estimated volume (5% miss). EBITDA was at INR8.9b (v/s est. INR9.5b); EBITDA/t stood at INR1,011 (v/s est. INR1,022). Adj. Profit came in at INR3.9b (v/s est. INR4.8b) during the quarter. SRCM’s strategic priorities are to become one of the largest cement manufacturer in the country, extract more value for shareholders from current operations and reach 80mtpa capacity through organic routes. It is also investing in technology to simplify workflow and processes. We largely maintain our FY24/FY25 estimates and believe SRCM’s cost benefits over peers are narrowing. The stock’s valuation at 20.3x FY24E EV/EBITDA appears rich and hence, we maintain our Neutral rating.

Outlook

The stock trades at 20.3x FY24E EV/EBITDA (v/s its 10-year average oneyear forward EV/EBITDA of 19.5x), which appears rich. We maintain our Neutral rating and value the stock at 16x FY25E EV/EBITDA to arrive at our TP of INR23,710.

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