Shree Cements Ltd. share price target

We maintain our HOLD rating on the stock.

Shree Cement’s (SRCM) Q1FY24 EBITDA (up 14% YoY) was 11% ahead of our estimates on improved performance in power segment. Core cement performance stood broadly in sync with volumes surging 19% YoY/flat QoQ, but realisations slipped ~2% QoQ.

We maintain our HOLD rating on the stock.

Shree Cement’s (SRCM) Q4FY23 EBITDA (in line) dipped 2% YoY despite 10% volume surge. Similarly, for FY23, EBITDA was down 19% YoY despite 15% volume jump. Cement industry’s inability to pass on the impact of fuel cost surge (due to high competitive intensity) to consumers takes the blame for the same.

Recommendation: We revise our rating from BUY to HOLD owing to the recent appreciation in stock price.

The Union ministry of commerce is in talks with regulators and other departments to put in place systems that will level the field between exports through e-commerce and traditional channels, when it comes to tax refunds.

Healthy Q4 revenue gains driven by both volumes (+10% YoY) and realisations (+6%)