NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
PL Capital Report
PL Capital has downgraded Shree Cement Ltd. to ‘Hold' from ‘Accumulate' and trimmed its target price to Rs 27,770 (earlier Rs 29,242), citing weaker‑than‑expected volume growth and a cut in FY27/FY28 Ebitda estimates by 6% and 7%, respectively. The brokerage continues to value the stock at 17 times enterprise value/Ebitda (Sept'27E).
Shree Cement reported a muted operating performance in Q3 FY26, with volumes remaining almost flat at 0.8% YoY. The blended net sales realisation declined 7.1% QoQ, largely due to softer cement prices in the East and South. Management indicated that pure cement NSR improved to Rs 4,652/tonne versus Rs 4,554/tonne last year, reflecting its value‑over‑volume strategic approach.
Costs remained largely contained during the quarter, with power and fuel expenses down 7% QoQ, helping Shree Cement deliver Ebitda of Rs 1,049/tonne, below Motilal Oswal's estimate of Rs 1,169/tonne.
On the capacity front, Shree Cement commissioned its 3 MTPA Jaitaran unit, and another 3 MTPA at Kodla is set to go live soon. This keeps the company on track to reach ~69 MTPA capacity by FY26. A further expansion to 80 MTPA is under evaluation, though moderation in utilisation levels at existing plants has made the management more cautious.
The brokerage flagged Shree Cement's loss of market share in recent quarters as a concern. While the company's margin protection strategy has helped profitability, it has come at the cost of volume growth and plant utilisation, raising questions about its ability to grow in line with the industry. A shift back towards volume‑driven growth may be essential to safeguard market positioning amid rising competition.
Nonetheless, Motilal Oswal noted that Shree Cement's strong balance sheet, healthy cash position, and industry‑leading cost structure continue to provide comfort and offer long‑term strategic flexibility.
Shree Cement currently trades at 17.5x / 16x EV/Ebitda for FY27/FY28, prompting the brokerage to maintain a ‘Hold' stance.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
