Shree Cements Ltd. share price target

Shree Cement’s Q3FY25 performance missed our projections. Revenue declined to INR 45,727 Mn, down 12.0% YoY (+12.8% QoQ). The QoQ growth was driven by robust volume expansion partially offset by decline in realization.

Shree Cement’s Q2FY25 result missed our projections despite revenue in line with our estimates.
Revenue declined to INR 40,542 Mn, down 15.1% YoY (-20.9% QoQ) due to weaker realization and a decline in volumes.

Shree Cements’ Q2 was muted due to the weak demand-pricing environment, owing to prolonged monsoons and low infrastructure spends by the government.

We retain a Buy rating on Shree Cement with a revised PT of Rs. 28,800, factoring a marginal downward revision in operational profitability led by lower volume growth than earlier envisaged.

We maintain our HOLD rating on the company

Realisation dent drags revenue growth by a steep 19%/23% in Q2FY25, partially offset by relatively lower volume decline of 7% YoY

Shree Cement (SRCM)’s 2QFY25 EBITDA was in line as lower-than-estimated
realization/t was offset by lower-than-estimated opex/t.

Maintaining market share will be the key priority in the supply glut market situation, though capacity utilisation may hover ~70%

Shree Cement’s Q1FY25 result missed our projections despite revenue in line with our estimates.
Despite falling cement prices, revenue increased 1.8% YoY (-5.1% QoQ) to INR 51,240 Mn led by strong volume growth.

We change our rating from BUY to HOLD

Shree Cement’s (SRCM) volume focus in Q1FY25 was exceptional given it stood flat QoQ (up 8% YoY) as against 5-20% drop reported by industry majors.

Shree Cement (SRCM)’s 1QFY25 EBITDA was significantly below our estimate, primarily due to a lower-than-estimated realization (6% miss).

Standalone revenues marginally lagged estimates at Rs. 4835 crore (down 2.7% y-o-y) as lower than
estimated realisations (down 10% y-o-y, on higher sales in the Eastern region.

JKCE: Focused on growth; earnings intact; upgrade to BUY. RBI Dividend: Record high. SRCM: Cost savings key driver of performance; valuations pricey. BANDHAN: In line with recovery plan. ERIS: Strong revenue growth; integration ongoing. MTLM: Misses estimate on weak plywood margin; upbeat outlook.

Shree Cement reported better-than-expected numbers, which beat estimates across the board.
Revenue increased 6.5% YoY to INR 54,328 Mn due to strong volume growth despite pressure on cement prices.

We maintain our BUY rating on the stock.