Brokerages gave a mixed but broadly constructive read on Shree Cement Ltd. after its March quarter results, emphasising on better operating performance. However, the next few quarters will be crucial for the cement major, as per analysts.
Shree Cement Ltd reported a 4.31% decline in consolidated profit to Rs 531.99 crore during the March quarter. The company had posted a net profit of Rs 555.98 crore in the year-ago period, according to a regulatory filing from the Bangur family-promoted Shree Cement Ltd (SCL).
Shree Cement owns brands such as Roofon, Bangur Power, Shree Jung Rodhak, Bangur Cement, Powermax, Magna, and Rockstrong.
Morgan Stanley On Shree Cement Ltd.
Morgan Stanley has maintained its 'underweight' rating on the stock with a target price of Rs 25,500, implying only about 1.4% upside from the current market price of Rs 25,140. The brokerage said Shree Cement reported a good set of numbers in the fourth quarter of FY26 and management has guided for around 10% year-on-year volume growth in FY27.
Domestic volumes rose about 9% year-on-year, which Morgan Stanley said was in line with its estimate and suggested some market share gains. After losing market share for two years, the company is now guiding for around 40 million tonnes of volumes in FY27. The company said its efforts to narrow the pricing gap with the market leader are continuing, although management is now more focused on increasing volumes. The brokerage also pointed to growth in the ready-mix concrete (RMC) business, with revenue rising to around Rs 0.9 billion in the quarter from Rs 0.7 billion in the previous quarter.
Even so, Morgan Stanley remains cautious saying that the Middle East conflict could push up costs, which may hurt both volumes and margins. It added that while management has taken price hikes of around Rs 25 per bag over the past month, it wants to see whether these increases can be sustained. In its view, the sustenance of good numbers will be the key issue to watch.
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Citi On Shree Cement Ltd.
Citi, on the other hand, has maintained its 'buy' rating, though it has cut its target price to Rs 29,200 from Rs 31,650. However, despite the cut in target price, the brokerage is still implying about 16.1% upside as compared to the current market price. Citi said Q4 EBITDA came in 7% ahead of its estimate, even though it fell around 9% year-on-year due to lower realisations and higher costs.
Still, higher volumes, improving efficiency and a clear focus on growth give Citi confidence. It said Shree's operational efficiencies should support the company in a volatile environment, while stable strategy and volume growth could improve investor sentiment.
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