Shree Cement Q1 Results Review - Muted Performance Due To Pricing Pressure: Dolat Capital

Dolat Capital Report

Shree Cement Ltd.'s Q1 FY25 results came below estimates, however volume was in line. We expect revenue/Ebitda/adjusted profit after tax compound annual growth rate of 7.2%/9.3%/-8.3% over FY24-26E, led by 9.0%/14.7% volume growth and -8.5%/0.5% blended realization growth in FY25E/FY26E.

We decrease our FY25E/FY26E Ebitda estimates by -17.5%/-11.3%, post factoring lower blended realization/tonne. Additionally, profitability is expected to be lower (versus earlier) due to pricing pressure. Accordingly, we revise our rating to ‘Reduce’ from Accumulate with revised target price of Rs 24,906 based on 16x FY26E enterprise value/Ebitda + 50% of FY26E capital work in progress + 0.5 times P/B UAE subsidiary.

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