Shree Cement Limited provides building materials. The company manufactures and sells cement and cement products in India. The company currently operates with a total cement capacity of 44.4mpta of which...

Shree Cement Q2 Results: Profit Rises 77% Led By Lower Costs Shree Cement Ltd.'s quarterly profit rose amid lower expenses and depreciation. Net profit increased 70% year-on-year to Rs 526.97 crore in the quarter ended September. Revenue rose 8% year-on-year to Rs 3249.93 crore. The company operating margins up by 163 bps to 30.76%. As a result operating profit was up by 14% to Rs 999.73 crore. Profit before interest,...

Shree cement (SRCM) reported Q2FY21 EBITDA above our/consensus estimates (CE) by 7%/20% at Rs9.9bn, up 17% YoY. The beat was largely led by better than expected realisations. SRCM has evolved as a mature player over last couple of years with discipline on both volumes and prices in its North markets (constitutes 2/3rd of its volumes). This is reflected in highest ever margins since FY09. However,...

Petronet LNG: Our BUY recommendation on PLNG with a price target of INR 294 is premised on robust volume offtake in FY21/22E as (1) benign LNG prices will ensure its high imports, in turn allowing full utilisation at Dahej on its expanded capacity, and (2) completion of the Kochi-Mangalore pipeline in 2HFY21 would subsequently raise utilisation at the Kochi terminal. 2Q EBITDA was 43% above our estimates, led by a 19% beat on total volumes and higher-than-anticipated marketing margin. APAT was 69% above our estimates mainly owing to the trickle-down effect of the beat in EBITDA and higher-than-anticipated other income. Jubilant FoodWorks: Jubilant reported mixed 2Q with a marginal miss in revenue and beat in the margin. Revenue/EBITDA was up -19/-9% YoY vs. the expectation of -17/-18%. SSG was at -20% (HSIE -15%), while LFL was at -13% if we remove the store closure impact. Sequential growth was healthy (much better than peers), as system sales recovered to 85/92/96% of last year in Aug/Sep/Oct. Recovery has been driven by strong growth in delivery and takeaway channels, as dine-in has continued to remain under pressure. Delivery charges, along with benign raw material, were partially compensated by EDV offers; still, gross margin expanded by 350/80bps YoY/QoQ to 79%. EBITDA margin expanded by 286bps YoY. We slightly increase EPS for FY21/22/23 to reflect better margin. We roll forward our target price to Sep-22E EPS and value JUBI at 45x P/E to derive a target price of Rs 1,800. We believe a large part of the recovery is priced in...

Shree Cements Ltd (SRCM) reported good set of numbers for 2QFY21 with strong volume growth and further improvement in the cost structure. The management had earlier set an ambitious target of doubling its capacity from the current level of 40mn mt to 80mn mt in the next 6-7 years with an intermediate target of reaching 57mn mt in the next 3 years with primary focus of capacity addition in North and East markets. Given the Covid-19 pandemic, we expected these plans to be curtailed or delayed. However, given the surprising surge in demand, the management has revived the expansion plans. Given the current low utilisation of SRCM and upcoming capacities in East and West, we believe that SRCM is well positioned to benefit from the current demand surge witnessed...

Shree cement (SRCM) reported Q2FY21 EBITDA above our/consensus estimates (CE) by 7%/20% at Rs9.9bn, up 17% YoY. The beat was largely led by better than expected realisations. SRCM has evolved as a mature player over last couple of years with discipline on both volumes and prices in its North markets (constitutes 2/3rd of its volumes). This is reflected in highest ever margins since FY09. However,...

Results were above estimates on all fronts except realizations were in line. SRCM posted 7.9% YoY growth in revenue to Rs30.2 bn led by 14.1% YoY volume increase to 6.5mt slightly offset by decline in blended realization by 5.5% YoY (-1.9% QoQ) to Rs4,628/tn. EBITDA up...

Shree Cement Limited (Shree Cement) has corrected ~13% over trailing fortnight. As per the DPIIT, cement production declined by 38% y-o-y and 13.5% y-o-y during Q1FY2021 and July 2020 led by impact of Covid-19 and the onset of monsoons respectively. However, our interaction with the management of Shree Cement suggest that it has witnessed volume growth of 7% y-o-y and 6% y-o-y during July 2020 and August 2020 while cement offtake has been good during September 2020 till date. Hence, we believe Shree Cement should continue its industry outperformance during Q2FY2021 as was seen during Q1FY2021 (where Shree Cement reported 19% y-o-y decline in...

Decline in volumes for 1QFY21 was higher than 4QFY20 because of only few COVID-19 affected weeks in 4QFY20. Sales volume for the current quarter declined 18.6% YoY (down 28.7% QoQ) to 4.9MT, attributed to COVID-19 related slowdown. Cement sales realization on consolidated basis was down 7.7% YoY at INR 5,031/t but improved...

Shree Cement Q1 Results, marginal rise in profit, revenue dips by nearly a quarter The cement makers net profit rose 2.1% year-on-year to Rs 329.30 crore in the three months ended June as against Rs. 379.67 crore during the corresponding quarter last year. During the quarter ended 30th June, 2020, company's Indian operations were partially affected due to lockdown announced on account of Covid -19 pandemic by state and central...

Shree Cement Limited (Shree Cement) reported lower-than-expected operational performance for Q1FY2021,even as net profit beat estimates led by higher other income and lower depreciation. Standalone net revenues declined 23.4% y-o-y to Rs. 2,326 crore led by 18.6% y-o-y decline in volumes (including clinker) affected by COVID-19 lockdown in April 2020. Blended realisation lagged estimates at Rs. 4,718/tonne(-5.8% y-o-y, +1.3% q-o-q) likely on account of regional sales mix and lower merchant power revenue. EBITDA/tonne at Rs. 1,421 (-4.5% y-o-y, -9.0% q-o-q) came in lower than estimate due to weak realization. Its Opex/tonne was...

Shree Cement has a strong presence in the north, eastern markets. Historically, every time sales dip in a particular year, it has bounced back strongly and delivered robust volume growth in coming years despite a setback. This is also been reflected in the company's current quarter performance where volume decline has stayed lowest (down 18.6% YoY vs. industry (down ~33% YoY). While current scenario poses near term headwinds, we expect the company to rebound in a strong manner. Expectations of normal monsoons would provide some respite to the...

Shree Cements Ltd (SRCM) has reported decent set of numbers for 1QFY21. EBITDA at Rs7bn was 3.4% higher than our estimate but various operating parameters were lower than expectations. Revenue at Rs23.25bn declined by 23% YoY as volume declined by 18.6% YoY (much better than our expectation) whereas realization declined by 5.9% YoY (much lower than our expectation). Sharp YoY decline in power & fuel costs resulted in 6.4% YoY decline in operating costs/mt. As a result, EBITDA/mt came in at Rs1,421 against our expectation of Rs1,598. We believe that the company has tried to maximize volume growth in the quarter to absorb the fixed costs in a better way. This has resulted...

SRCM reported Q1FY21 earnings marginally below our expectation due to higher costs. Company depicted strong maturity over last one and half year with tight discipline on volumes and prices in its North market. This is reflected in highest ever margins since FY09. However, we believe that margins have peaked-out as we see stiff competition from new capacities, weak demand outlook and increased likelihood of leakage on volumes...

Shree Cement (SCRM)s 1QFY21 result was relatively weaker than large-cap peers (UTCEM, Ambuja) as EBITDA/t declined to INR1421/t v/s sharp While we keep our estimates largely unchanged, we see challenges related to near-term margins for SRCM. Depreciation expense declined 33% YoY to INR2.7b, driving the beat on PAT While SRCMs home market of northern India remains better placed (due to consolidated market structure and lower capacity additions), its increasing exposure to the eastern region is expected to result in blended margin decline. A strong balance sheet (~INR33b net cash at FY20-end) and limited capex provide comfort in the current uncertain demand environment on account We value SCRM at 16x FY22E EV/EBITDA and add the value of the UAE operations at USD70/t to arrive at TP of INR21,500. market of northern India continues to be better placed (owing to a consolidated market structure and lower capacity additions), its increasing exposure to the eastern region would likely result in decline in blended margin.

Near term outlook: Sales contraction is expected to continue in June, too, driven by continued sharp decline in non-trade segment. Demand is coming mainly from on-going projects. In our view, cement prices have peaked out in Apr/May and should cool off in subsequent months as demand picks up. Robust pricing so far and lower input costs YoY should moderate earnings decline on account of volume loss in 1HFY21. The Indian cement industry fared better than expected in May 2020. While Covid lockdown hit April sales hard (down 80% YoY), May sales appears to be down only 20% YoY, as per our channel checks. Demand from the rural/semi-urban regions drove trade sales in May to fall at lower pace YoY. Labour and capital shortage hit non-trade sales harder. Better than expected trade demand kept cement prices buoyant across markets. YTD-1QFY21 prices are up 4-31% YoY! Falling petcoke/coal/diesel prices will continue to cushion margins amid weak demand.

Shree Cement's top-line de-grew by 2% Y-o-Y to `32,175 mn primarily on account of drop in sales volume partially impacted by Covid-19 pandemic, however robust pricing in its key markets (northern and central markets) controlled the top-line damage to certain extent. EBITDA in Q4FY20 stood at `10,789mn up ~27.3%Y-o-Y on the back of falling energy costs and lower raw material costs. Energy costs and Raw material costs plunged 19% YoY and 27% YoY to `6,217mn and `1,816mn respectively in the mentioned period. Company's EBITDA margins were up at 33.5% from 25.8% in Q4FY19 and 29.8% in Q3FY20. Company's PAT rose 83.3% Y-o-Y to `5882mn in Q4FY20 on account of higher other...

Shree Cement Limited provides building materials. The company manufactures and sells cement and cement products in India. The company currently operates with a total cement capacity of 44.4mpta of...

Shree Cement (SRCM) EBITDA for Q4FY20 was 15% / 8% higher than our / consensus estimate. Beat is led by a) higher subsidy income, and b) lower opex/t. SRCM has booked subsidy income of Rs1.2bn in 4Q vs Rs1bn subsidy booked over 9MFY20. Opex/t was flat QoQ, and was led by lower raw material cost and other expenses. SRCM has resumed production starting 20th April but we expect it to witness volume growth only post monsoon. We have modeled volume to decline by 14% YoY and EBITDA/t to reduce to Rs1,398 vs Rs1,487 YoY in FY21E. We maintain estimate and retain TP of Rs16,418 (valued at 15x FY22E EBITDA). Stock trades at a premium...

decline in total income from operation to Rs 3,415.14 crore for third quarter ended December 2020. The profit was aided by an improved operational performance. Operating Margin (OPM) increased by 530 bps to 30.9%. Thus, operating profit (OP) rose 18% to Rs 1,056.73 crore....