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IDBI Capital Report
Shree Cement Ltd. Q4 FY24 Ebitda came higher than our and consensus estimates by 4% & 14% respectively. Shree Cement's QoQ Ebitda was flat, which is better than peer who has reported a decline.
Shree Cement Ebitda/tonne of Rs 1393 is higher than the peers like Ultratech Cement Ltd. (Rs 1173/tonne) in Q4 FY24.
Its capacity addition plans are intact and Shree Cement has interim target to reach 65 million tonnes per annum by FY25. The company is aiming to reduce average selling price gap with UltraTech Cement with launch of new brand, we see this is positive.
However, given weakness in cement prices we have cut ASP and Ebitda for FY25/26 and target price is revised to Rs 27,088 (earlier Rs 30,069).
We expect its capacity to increase by 11%/10% in FY25E/26E and to drive volume growth. Industry's ASP increase is expected in H2. Retain Hold rating.
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