Accumulate Shree Cement; target of Rs 31,769: Prabhudas Lilladher

Prabhudas Lilladher's research report on Shree Cement

SRCM reported weaker than expected std operating performance in Q2FY26 on muted volume growth which grew ~4% YoY to 7.9mt. Blended NSR declined 1.5% QoQ due to weakness in cement prices in the East and South. Elevated raw material costs and weak operating leverage led to higher other expenses. Consequently, EBITDA/t stood at Rs1,108 (PLe Rs1,206). Mgmt. indicated some price erosion during the festive period, which would weigh on Q3 realizations, though improving demand supported by GST rationalization and seasonally stronger activities is expected to partly offset the impact. With the commissioning of a 3.65mt clinker unit at Jaitaran and near-completion of the 3mt integrated plant at Kodla, SRCM remains on track to reach ~68mt by FY26 and ~80mt by FY28E depending upon demand and utilization scenarios.

Outlook

We cut our FY27/28E EBITDA estimates by ~2% each on lower volume assumptions. The stock is trading at EV of 16.4x/14x FY27/FY28E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs31,769 (earlier Rs32,410) valuing at 17x EV of Sep’27E EBITDA.

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Shree Cement - 29102025 - prabhu