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Shree Cement – Better than expected performance, led by pick-up in sales volumes

ICICIdirect Research 08 May 2026 DISCLAIMER

Shree Cement’s operational performance has been better-than-expectations, mainly on account of significant pick-up in volume growth (9.5% YoY in Q4FY26 as against de-growth of ~2% YoY in 9MFY26). Volume growth in Q4 was primarily driven by better demand and ramp-up of recently added capacities. Also, management has stated that company has already benefited from its pricing strategy and closed the pricing gap with top players
EBITDA/ton was lower by ~17% YoY to Rs 1161/ton in Q4FY26 mainly because of higher raw material cost. For full year FY26, EBITDA/ton stood at Rs 1154/ton (+7.8% YoY), largely in-line with expectations. The company has also taken cement price hikes by Rs 25/bag to mitigate recent increase in fuel & packing materials cost (needs to be monitored over the coming days)
Company targets to reach total cement capacity of ~80 mtpa by FY28E/29E (from ~70 mtpa at present), through possible expansion of ~5 mtpa in north-east region. Company has already acquired 3 limestone mines in Meghalaya, having reserves of ~600 million tonnes
On volume growth front, company guides volume growth of 9-10% YoY in FY27E
We have reduced our EBITDA estimates by 8-10% for FY27E & FY28E, factoring in the recent increase in costs. However, we maintain BUY on Shree Cement with a revised target price of Rs 29,800

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