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Shree Cements' Q1 earning beat estimates as sales volumes were strong and capacity expansion is coming on stream. In an interview to CNBC-TV18, HM Bangur, MD of the company spoke about the results and his outlook for the company.
Net Sales are expected to increase by 3.3 percent Q-o-Q (up 11.9 percent Y-o-Y) to Rs 2459.7 crore, according to Edelweiss. Shree Cement to report net profit at 404.5 crore down 20.3% year-on-year.
Average cement prices for the year would move higher by 3-4 percent less than inflation but in the short-term, they could move up or down dramatically, said HM Bangur, MD, Shree Cement.
Key issues to watch out for would be volume & pricing recovery for north India, update on scale-up of recently commissioned units in east and new expansion plans.
Net Sales are expected to increase by 26.9 percent Q-o-Q (up 15.9 percent Y-o-Y) to Rs 2340 crore, according to HDFC Securities. Shree Cement to report net profit at 360 crore up 53.9% quarter-on-quarter.
Net Sales are expected to increase by 20.1 percent Q-o-Q (up 9.7 percent Y-o-Y) to Rs 2213.8 crore, according to Motilal Oswal. Shree Cement to report net profit at 228.8 crore down 3.7% quarter-on-quarter.
"It will take probably one-two months more for the prices to come back", Subhash Jajoo, CFO of Shree Cements told CNBC-TV18.
Shree Cement's third quarter profit is expected to increase sharply by 143 percent year-on-year to Rs 250 crore on strong operational performance.
Net Sales are expected to decrease by 5.9 percent Q-o-Q (up 3.3 percent Y-o-Y) to Rs 1887.9 crore, according to Motilal Oswal.
Net Sales are expected to decrease by 9.2 percent Q-o-Q (up 11.9 percent Y-o-Y) to Rs 2045.6 crore, according to Edelweiss.
HM Bangur, MD, Shree Cement is upbeat on seeing an uptick in demand in the second half from November 15 onwards.
Shree Cement is expected to report strong earnings in July-September quarter on account of high volumes, realisations and lower operating cost. Profit is seen rising 181 percent year-on-year to Rs 362 crore and revenue may grow 18 percent to Rs 2,040 crore in Q2, according to average of estimates of analysts polled by CNBC-TV18.
Net Sales are expected to increase by 0.4 percent Q-o-Q (up 28.1 percent Y-o-Y) to Rs 2208.5 crore, according to Kotak Securities.
Net Sales are expected to increase by 4.4 percent Q-o-Q (up 22.5 percent Y-o-Y) to Rs 2107 crore, according to ICICI Securities
Net Sales are expected to increase by 4.4 percent Q-o-Q (up 22.5 percent Y-o-Y) to Rs 2107 crore, according to ICICI Securities
Volume growth is likely to be at 30 percent YoY (5.35 million tonne) led by capacity addition in Bihar and Chhattisgarh.
Prakash Diwan, prakashdiwan.in is keen on buying into the cement pack with ACC and UltraTech as his top picks. According to him, the next beat from cement could be from Shree Cements.
The 15 percent year-on-year volume growth for the fourth quarter of FY16 came as a surprise but maintaining it in the coming quarters will be a challenge, says Murtuza Arsiwalla, Analyst at Kotak Institutional Equities.
Cement capacity utilisation for the quarter came down from 88 to 77 percent because of addition of new units. The new plant capacity utlilisation currently stood at around 55 percent, said HM Bangur, Managing Director, Shree Cement.
Operating profit in Q3 may increased 33 percent Rs 407 crore and margin may expand 270 basis points to 22.5 percent compared to year-ago period.
The company has managed to achieve 80 percent capacity utilisation, including the Chattisgarh plant, in the quarter under review. Bangur expects the Chattisgarh plant to run at 60 percent capacity in the next quarter.
Operating profit may slip 29 percent year-on-year to Rs 310 crore and margin may drop 710 basis points to 19.4 percent in June quarter.
Shree Cement second quarter net profit fell 18.9 percent year-on-year to Rs 93.7 crore. But HM Bangur, Managing Director, Shree Cement remains optimistic about the future.
Shree Cements' second quarter profit after tax may decline 61 percent year-on-year to Rs 85 crore due to interest, depreciation and tax costs, according to the average of estimates of analysts polled by CNBC-TV18.
Net sales may jump 25 percent to Rs 1,560 crore in the quarter ended September 2014 compared to Rs 1,247 crore in same quarter last year.