Shree Cement Ltd. reported beat on results except volume in line.
Shree Cement posted +21.3% YoY (-8.3% QoQ) growth in revenue to Rs 45.8 billion led by +10% YoY (-8% QoQ) in volume to 8.2 million tonne coupled with +10.3% YoY (-0.3% QoQ) in blended realisation/tonne to Rs 5,591.
Shree Cement’s Ebitda/adjusted profit after tax +67%/ +159.1% YoY to Rs 8.7 billion/ Rs 4.9 billion in Q2 FY24.
We expect 12.4%/ 22.3%/ 29.9% revenue/ Ebitda/adjusted profit after tax compound annual growth rate over FY23- 26E led by 12%/ 11%/ 15.6% volume growth and 3.4%/ -3%/ -1.4% blended realisation growth in FY24E/ FY25E/ FY26E.
We maintain our Ebitda estimates for FY24E/ FY25E and introduce FY26E. Considering rich valuation (19.6 times/ 16.6 times enterprise value/Ebitda FY25E/ FY26E), we maintain ‘Sell’.