Shree Cement - Expanding Footprint Largely In Existing Markets: Motilal Oswal

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..Motilal Oswal Report.We estimate Shree Cement Ltd.’s Ebitda to report ~13% compound annual growth rate over FY24-26, led by ~10% volume growth and ~3% improvement in Ebitda/tonne. We estimate its blended Ebitda/tonne at Rs 1,225/Rs 1,260 in FY25/FY26 versus an estimated Ebitda/tonne of Rs 1,190 in FY24 (average Ebitda/tonne stood at Rs 1,250 over FY19-23). We estimate Shree Cement to generate cumulative operating cash flow of Rs 78 billion over FY25-26 while, estimated capex of Rs 90 billion. We expect the company to post free cash flow outflow until FY26 due to accelerated growth plans (capex guidance of Rs 125 billion over FY25- FY27), leading to a negative FCF yield. Its net cash is estimated to decline to Rs 37 billion versus Rs 60 billion as of December 2023, given the aggressive expansion plans, which entails a higher capex. .We cut Ebitda estimates for FY25/26 by 5% (each) due to pricing pressure (all India average cement price declined 5-6% QoQ in Q4 FY24E). The stock trades at 18 times/16 times FY25E/FY26E enterprise value/Ebitda (versus its 10-year average one-year forward EV/Ebitda of 20 times).We reiterate our Neutral rating and value Shree Cement at 17 times FY26E EV/Ebitda to arrive at our target price of Rs 27,700..Click on the attachment to read the full report:.Chemplast Sanmar - Long-Term Contract In Custom Manufacturing Provides Confidence: ICICI Securities .DISCLAIMERThis 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.

Shree Cement - Expanding Footprint Largely In Existing Markets: Motilal Oswal

Focus shift on improving brand equity

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP

Shree Cement - Expanding Footprint Largely In Existing Markets: Motilal Oswal

Focus shift on improving brand equity

Choose a plan

Follow Us

DOWNLOAD THE APP