Shree Cements Ltd. share price target

Q3 revenue growth of 20% YoY backed by sharp 11% volume uptick to 8.9mt

Recommendation: We roll over our estimate to FY26 and change our rating from HOLD to BUY on the back of strong operating performance.

With an upbeat Q2FY24 performance, Shree Cement (SRCM) has reclaimed its industry supremacy. While reported EBITDA stood just 2% ahead of estimates, a closer look brings forth the following positives for its core cement business – a) ~2% QoQ uptick in realisation (vs it being flat for major peers) and b) ~3% QoQ rise in EBITDA/t (vs QoQ dip for other large peers).

Q2 volume growth of 10% YoY could have been higher but for a pursuit of realisation gains (+10%)

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.