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Informist, Monday, Aug. 4, 2025

By Rajesh Gajra

NEW DELHI - Shree Cement Ltd. is likely to benefit from the favourable demand conditions, price hikes and drop in input costs in the domestic industry, and report strong bottom line growth. These same factors had led to UltraTech Cement Ltd. reporting a strong set of earnings numbers for the June quarter.

Shree Cement's operating margin is seen getting a fillip due to its focus on premium products. However, analysts are split over the likely volume growth the company will report in the June quarter with some estimating an on-year decline of around 2-3% while some expecting volume to increase by around 3%.

Analysts, however, agree that the company's realisation will likely be higher than compared to the year ago quarter which will lift its revenue growth by high single digit. The bottom line of the company is seen up strongly on the back of this revenue growth, a fall in pet coke and coal prices, as well as a decline or a moderate increase in other input costs.

Shree Cement will likely report a net profit of INR 5.46 billion for the June quarter according to an average of estimates from 13 brokerage firms. Excluding an outlier net profit estimate of INR 8.10 billion by YES Securities (India) the average estimated net profit is INR 5.24 billion, up 65% on year and down 5.8% on quarter. Excluding YES Securities' estimate, the highest net profit estimate is INR 6.16 billion by Anand Rathi Share and Stock Brokers while the lowest is INR 4.50 billion by Motilal Oswal Financial Services.

The revenue of the company is estimated to increase 7.3% on year to INR 51.87 billion in the June quarter. The estimate is, however, 1% lower than the reported revenue for the trailing quarter. Among the revenue estimates the highest is INR 57.85 billion by YES Securities while the lowest is INR 49.02 billion by HDFC Securities. The earnings before interest, tax, depreciation, and amortisation are seen at INR 13.64 billion according to an average of estimates by 12 brokerages.

The company will announce its June quarter financial results Monday. In the March quarter, Shree Cement had reported a 16% on-year drop in net profit to INR 5.56 billion and a 3.3% increase in revenue to INR 52.40 billion. The shares of the company are up marginally  since it announced its March quarter earnings.

The volume of Shree Cement in the June quarter is seen declining 2% on year by analysts at the institutional equities division of Kotak Securities while brokerages ICICI Securities and Prabhudas Lilladher both estimate a 3% decline. ICICI Securities, however, expects the sales realisation to surge 11% on year on the back of "firm prices" while Kotak said blended realisation will likely rise 8% on account of price hikes in key markets. According to Prabhudas Lilladher, price hikes in east and south India will likely raise realisation of Shree Cement by 3% on year.

Shree Cement's volume is seen increasing 2.5% on year by brokerage Nuvama Wealth Management while Motilal Oswal Financial Services sees it going up 3%. YES estimates a much higher volume growth of 8% on year. The realisation may rise 6% on year "led by a steep price hike in the South," Motilal Oswal Financial said.

The company's "value over volume strategy" will likely result in EBITDA per tonne jumping up 56% on year, Prabhudas Lilladher said. Operating expenses per tonne are seen declining 3% on year by brokerage YES Securities. Along with strong volume growth and improved realisation, the company's EBITDA will likely surge 81%, YES said.

After the June quarter earnings are announced, investors will look out for management commentary on cement demand, the geographical spread of realisations, outlook on input costs, update on clinker and grinding capacity additions for the current financial year, and the progress the company has made from its recent foray in ready mix concrete cement market in cities, including in Mumbai and Hyderabad.

At 1112 IST, shares of Shree Cement were trading down 0.5% at 30,530 on the National Stock Exchange. The stock currently has 10 "buy" calls from brokerages at an average target price of INR 32,715, nine "hold" recommendations at an average target price of INR 30,719, and two "sell" calls at an average target price of INR 29,958.

Following are the earnings estimates for Shree Cement for the June quarter based on reports from 13 brokerage firms in descending order of estimate of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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