29610.0000 -80.00 (-0.27%)
NSE Jun 13, 2025 15:31 PM
Volume: 16,460
 

29610.00
-0.27%
HDFC Securities
During FY20E, SRCM vol growth will flatten after 8-yr of steady growth (industry leading 11% CAGR) as SRCM is focused on trade sales. This has also helped SRCM's strong margin expansion in FY20E (~Rs 470/MT YoY) to industry best of ~Rs 1,470/MT. In our view, while sales ramp-up from its east, south & west expansions should drive 9% vol CAGR in FY20-22E, volatile pricing in these markets should prevent further margin expansion (with downside risks on higher vol growth). Thus, we estimate its RoCE/RoE to marginally cool off by ~100-200bps in FY21/22E. Our EBITDA forecasts are in-line consensus nos. We value standalone cement biz at 15x EV/EBITDA (in-line industry leader UltraTech's target valuation) - for SRCM's industry leadership in cost & return ratios and strong capex management - leading to SOTP value of Rs 19,900. As the stock currently trades at an expensive 19.8/18.4x FY21/22E EBITDA, and at an EV of USD 280/MT, we downgrade our rating to SELL from Neutral. We downgrade Shree Cement (SRCM) to SELL with a TP of Rs 19,900 (SOTP based: Cement (India)/power biz at 15/5x Sep21E EBITDA, and UAE subsidiary at 1x BV). Our TP implies cement EV of USD 222/MT. In 3QFY20, SRCM reported strong results (Rev/EBITDA in-line our est).
Number of FII/FPI investors increased from 532 to 547 in Mar 2025 qtr.
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