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Informist, Thursday, Feb. 5, 2026

 

By Astha Oriel

 

MUMBAI - Shree Cement Ltd. is likely to report double-digit year-on-year rise in its December quarter top line and bottom line, according to brokerages tracking the company. The company's net profit growth will be driven by increase in volumes, but will be limited due to a decline in operating margin because of rise in fuel and power costs and decline in cement prices. Increase in construction activity, high demand for cement after the cut in the Goods and Services Tax, and higher realisations are expected to boost the company's net revenue.

 

The company's net profit is expected to be INR 3.54 billion, up more than 54% on year and nearly 28% on quarter, according to the average of estimates from 13 brokerages. In the year-ago quarter, the net profit was INR 2.29 billion. The highest estimate for net profit is INR 4.4 billion from Systematix Shares and Stocks (India) Ltd., whereas the lowest estimate is INR 2.75 billion from YES Securities (India) Ltd. This will be the third consecutive quarter of a year-on-year increase in the company's net profit.

 

Net sales of the Kolkata-based cement maker are expected to be INR 47.78 billion, up nearly 13% on year and over 11% on quarter, according to the average of estimates. The company's net sales were INR 42.35 billion in the year-ago quarter. The highest estimate for net sales is INR 49.87 billion from Emkay Global Financial Services Ltd., whereas the lowest estimate is INR 43.37 billion from YES Securities.

 

The cut in the GST on cement to 18% from 28% boosted the company's volume for the December quarter. Estimates by seven brokerages indicate Shree Cement's volumes are likely to rise 1-6% on year and 12-18% on quarter. The highest estimate for the company's volume is 9.3 million tonnes from Motilal Oswal Financial Services Ltd. and Axis Securities Ltd. The lowest estimate of volume is 8.9 million tonnes from JM Financial Institutional Securities Pvt. Ltd. and Nomura Equity Research. The company's volume was 8.77 million tonnes in the year-ago quarter.

 

Cement prices declined by 1-2% in the December quarter due to the cut in the GST and competitive pricing by cement manufacturers. The company's realisation, however, is likely to increase by 4-12% on year, according to consensus estimates. This is due to the company's primary focus in north India, where the pricing pressure was least visible as compared to in east and south India.

 

The company would continue to focus in north India and will continue to evaluate all possible methods to grow in this region over the coming years, the management had said in an analyst call after the September quarter earnings. The company's management expects better demand in north and western India than the rest of the country.

 

The company's earnings before interest, taxes, depreciation, and amortisation are expected to be INR 9.47 billion, flat on year and up more than 11% on quarter, according to consensus estimates. The highest estimate for EBITDA is INR 10.26 billion from Emkay Global Financial Services Ltd., whereas the lowest estimate is INR 8.20 billion from YES Securities.

 

The company's December quarter EBITDA margin is expected to decline to 18-21% from 25% in the year-ago quarter, according to seven estimates. This is due to an increase in the cost of fuel and power, low cement prices, and the depreciation of the rupee against dollar. Nomura estimates fuel and power cost will rise by 22% on year, whereas JM Financial expects an increase of nearly 14%.

 

The company will announce its December quarter results Friday. Shares of Shree Cement Thursday closed at INR 27,225 on the National Stock Exchange, down nearly 0.5% from the previous session. The shares have declined nearly 7% since the company's September quarter earnings were announced.

 

Out of the 13 brokerage reports on the company available with Informist, seven have a 'buy' recommendation on the stock with an average target price of INR 32,826. This is over 17% higher than the current market price. Five brokerages have a 'hold' call on the stock with an average target price of INR 30,559. One has given a 'sell' call with an average target price of INR 30,618.

 

Following are the December quarter earnings estimates for Shree Cement from 13 brokerages in descending order of the estimate of net profit in INR billion.

 

Brokerage (INR million)	Net Sales	Net Profit	EBITDA
Systematix Shares and Stocks (India) Ltd	49.40	4.40	10.00
Emkay Global Financial Services Ltd	49.87	4.27	10.26
Kotak Securities Ltd	49.41	4.04	9.88
Nuvama Wealth Management Ltd	48.06	3.95	9.74
ICICI Securities Ltd	45.86	3.88	9.60
Sharekhan Ltd	48.10	3.80	-
Motilal Oswal Financial Services Ltd	48.80	3.50	10.10
Elara Securities (India) Pvt Ltd	49.55	3.44	9.84
Axis Securities Ltd	48.05	3.37	9.90
JM Financial Institutional Securities Pvt Ltd	47.11	3.13	9.03
Nirmal Bang Equities Pvt Ltd	47.17	2.99	8.77
Nomura Equity Research	46.68	2.78	8.37
YES Securities (India) Ltd	43.37	2.75	8.20
Average	47.80	3.54	9.47

 

End

 

Edited by Ashish Shirke

 

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