Shree Cements Ltd. share price target

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...

SRCM's volume growth outperformed industry, hinting towards undercutting depicted strong maturity over last one year with tight discipline on volumes and prices in its Northern operations. This is reflected in highest ever margins since FY09 and best ever absolute bottom line. However, we see material downside risk to SRCM's margins due to competition from new capacities,...

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....

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...

Stronghold in operating markets to lead to strong bounce back Shree Cement has a strong presence in the north and eastern markets. Historically, every time, the company's sales dip in a particular year, it has bounced back strongly and delivered robust volume growth in the coming years, despite a setback. While the current scenario poses near term headwinds, we expect Shree Cement to rebound strongly. Expectations of normal monsoons would provide some respite to the industry as it would boost rural demand, which forms 30-35% total cement consumption. We...

Shree Cement Limited (Shree Cement) reported better-than-expected standalone operational performance, which was driven by better realisation and lower cost of production. The company's standalone revenue declined by 2% y-o-y to Rs. 3,217.5 crore on account of lower cement volume (down 5.4% y-o-y). The company has stopped providing power division's operational numbers from Q4FY2020, as most power is consumed for cement operations. Lower volume during Q4FY2020 was on account of COVID-19-led lockdown, which affected 10 days during Q4FY2020. Blended realisation improved by 3.5% y-o-y, led by higher cement prices in Northern...

8 May 2020 Shree Cements (SRCM) 4QFY20 results reflect the benefit of improved pricing as EBITDA/t has improved sharply as expected with decline in costs. A strong balance sheet (~INR45b net cash) and limited capex provides comfort in the current environment of weak demand due to COVID-19. We, however, believe this is factored in at the current valuation (15x FY22E rating. SRCMs 4QFY20 volumes declined 5.4% YoY to 6.9mt. This was much lower than the 10-12% YoY decline reported by peers ACC and Ambuja. power) was up ~3.5% YoY (+2% QoQ) to INR4,659/t (5% lower than est. INR4,881/t), which could be due to external sale of power (not disclosed from this quarter). Total revenue declined 2% YoY to INR32.2b (4% lower than est.). Blended cost/t declined 7% YoY (-3% QoQ) to INR3,097/t.

Strong Operating Performance despite Dismal Show by Power Division Shree Cement (SRCM) has reported a strong operating performance in 3QFY20 albeit missing our estimates. EBITDA grew by 20% YoY to Rs8.5bn (vs. our estimate of Rs9bn), while EBITDA/ tonne remained strong at Rs1,365/tonne vs. Rs1,067 in 3QFY19 and Rs1,451 in 2QFY19. Sales volume grew by 5.3% YoY to 6.25mnT, while average realisation stood at Rs4,512/tonne (+4.6% YoY and -3% QoQ) slightly below our estimate of Rs4,540. Operating cost/tonne for cement declined by 3% YoY and 1.7% QoQ to Rs3,147 (-3% YoY and -1.7% QoQ) mainly led by steep decline in input cost/tonne entailed by reduction in fuel cost. However, its power division has...

Strong Operating Performance despite Dismal Show by Power Division Shree Cement (SRCM) has reported a strong operating performance in 3QFY20 albeit missing our estimates. EBITDA grew by 20% YoY to Rs8.5bn (vs. our estimate of Rs9bn), while EBITDA/ tonne remained strong at Rs1,365/tonne vs. Rs1,067 in 3QFY19 and Rs1,451 in 2QFY19. Sales volume grew by 5.3% YoY to 6.25mnT, while average realisation stood at Rs4,512/tonne (+4.6% YoY and -3% QoQ) slightly below our estimate of Rs4,540. Operating cost/tonne for cement declined by 3% YoY and 1.7% QoQ to Rs3,147 (-3% YoY and -1.7% QoQ) mainly led by steep decline in input cost/tonne entailed by reduction in fuel cost. However, its power division has...

Better realization in cement; Weak power performance 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...