Shree Cement ( SRCM) is increasing its domestic capacity by ~32% over FY17-19 at an estimated capital cost of USD60/t. Acquisition of the asset in the UAE at USD76/t has also been at a significant discount and in line with the company's long-term strategy. SRCM's relatively low cost of production compared to peers has resulted in healthy margins and return ratios. As a result, it warrants premium valuations, in our view. We expect SRCM to deliver a better performance than industry due to 1) capacity ramp-up over FY17-19 and 2) a favorable market mix, with higher exposure to the north markets ( >70%), where prices are expected to be the highest