Shree Cement Q3 Results Review - Superior Performance 'Hold': IDBI Capital

IDBI Capital Report

Shree Cement Ltd.'s Q3 FY24 Ebitda came higher than our and consensus estimates by 6% & 15% respectively. Importantly, Shree Cement-

1. Ebitda/tonne of Rs 1388 is higher than the peers like Ultratech Cement Ltd. (Rs 1191/tonne), Dalmia Bharat Ltd. (Rs 1140/tonne) and Ambuja Cement Ltd. consolidated (Rs 1228/tonne) and

2. Its volume growth of 11% YoY is also higher than its peers volume uptick of low single digit.

After reporting weak set of number in previous quarters, Shree Cement financial and operational performance has improved in the last two quarters.

Shree Cement is aiming to reduce average sales price gap with Ultratech Cement with launch of new brand, we see this is positive.

We expect its capacity to increase by 11%/10% in FY25E/26E and to drive volume growth.

Post the result we have introduced FY26E and revised target price to Rs 30,069 (earlier Rs 26,008), valuing Shree Cement at 15 times FY26E enterprise value/Ebitda. Retain 'Hold' rating.

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