Shree Cement Q2 Results Review

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Shree Cement Ltd. reported revenue in line, however volume, Ebitda, Ebitda/tonne and adjusted profit after tax above estimates whereas realisation/tonne below estimates.

Shree Cement posted 17.9% YoY growth in revenue to Rs 37.8 billion led by up 18.0% YoY (-0.6% QoQ) in volume to 7.46 million tonne, which was partially offset by -0.1% YoY (-9.5% QoQ) in realisation/tonne to Rs 5,071.

Ebitda/ adjusted profit after tax reported -42.0%/ -66.9% YoY to Rs 5.2 billion/ Rs 1.9 billion in Q2 FY23.

We expect 12.2%/ 9.6%/ 0.4% revenue/ Ebitda/adjusted profit after tax compound annual growth rate over FY22-25E led by 13.1%/ 12.0%/ 8.5% volume growth and 2.7%/ 0.0%/ 0.0% blended realisation growth in FY23E/ FY24E/ FY25E.

We broadly maintain our revenue estimates for FY23E and increase Ebitda/adjusted profit after tax estimates by 7.7%/ 9.1% for FY23E factoring Q2 FY23. However, we maintain our estimates for FY24E and introduce FY25E.

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