More than half of Shree Cement Ltd.'s capacity is currently located in the Northern region of India.
This capacity location could help the company's profitability gain more compared to peers, since the North is expected to see better prices over the next two years.
Rise In Profits Expected
As per DAM Capital, Shree Cement should be the biggest beneficiary of the expected robust profitability in the North over FY25-27.
The North accounts for 60% of the company's capacity. While, 55-60% of the capacity that is expected to come online in the region is to come from the cement player.
Shree Cement's edge over profitability is also evident in the analyst expectations of the company's annual net profit growth in FY26. As per Bloomberg consensus estimates, the company is expected to see a 57% rise in profitability in financial year 2026. This compares to the 30-48% rise projected for its closest peers like UltraTech Cement Ltd. and JK Cements Ltd.
Why Is The North Best Placed?
The northern market is expected to have favourable supply-demand dynamics over FY25E-27, DAM Capital said. This should help pricing and profitability in the region remain stronger versus others.
On the other hand, regions like the south and east of India will see 53% of the 107 MTPA planned capacity addition over FY25-27. This would add to the already oversupplied market these regions would see.
The south is also expected to see more pressure from the ramp-up of India Cements' and Penna Cement's recently acquired low utilised assets.
Region-Wise Price Hikes
As per Nomura's channel checks, the northern region of India has seen the highest quarter-on-quarter cement price uptick of 4.3% in Q4 FY25 so far. This marks an increase of Rs 15 per bag.
The East has seen the second highest increase in prices at 3.6%, while the central, western and southern regions have seen a quarterly increase of less than 1%.
As per Nuvama's dealer checks, the north region has taken a price hike of Rs 5-7 per bag in March 2025. Dealers also noted another price hike of Rs 10 per bag post-Holi.
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