Shree Cements Ltd. share price target

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 (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,...

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...

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 (SRCM) Q1FY21 EBITDA was higher than our estimate. Beat in the number is driven by lower a) volume decline at -22% vs our est. of -35% and b) other expenses at Rs3.5bn vs est. of Rs4.4bn. But vis--vis the industry which has witnessed QoQ increase in the profitability (EBITDA/t), SRCM reported decline in EBITDA/t at Rs1460 (-10% QoQ). This is due to flat realization and higher freight cost at +10% QoQ. We have factored better than estimated number of Q1FY21 in full year estimate and revised EBITDA up by 12/11% for FY21/22E respectively. TP is revised to Rs19,903 (earlier Rs16,418). But retain REDUCE rating on the stock, as we understand SRCM...

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 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...

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.

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...