Buy Shree Cement; target of Rs 30,800: Sharekhan

Buy Shree Cement; target of Rs 30,800: Sharekhan

Sharekhan is bullish on Shree Cement has recommended buy on the stock with a revised price target (PT) of Rs. 30,800 in its research report dated February 04, 2022.







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February 08, 2022 / 01:02 PM IST





Shree Cement Limited (Shree Cement) reported marginally better than expected Q3FY2022 numbers. Standalone revenues grew by 7.3% y-o-y led by a strong rise in blended realization (up 17.3% y-o-y, higher than expected due to the sale of coal to its UAE plant) while volumes declined by 8.5% y-o-y (in-line with estimate). Blended EBITDA/tonne at Rs. 1,260 (-17% y-o-y) was marginally lower than our estimate of Rs. 1313. Higher purchase of stock-in-trade led to total raw material costs rising by 124% y-o-y on a per tone basis while power & fuel costs were up 59% y-o-y, both of which offset higher than estimated realizations. Hence, standalone operating profit/net profit was down 24.2%/21.4% to Rs. 825.5 crore/Rs. 492 crore. It commissioned 3MTPA grinding capacity at Pune on 1st February 2022. Shree cement is undertaking standalone capacity expansion to 53MTPA by FY2024 in Northern and Eastern regions. It targets to achieve 80 mtpa by 2030