Prabhudas Lilladher recommended accumulate rating on Shree Cement with a target price of Rs 18750 in its research report dated April 30, 2018.
Prabhudas Lilladher's research report on Shree Cement
Shree Cement (SRCM) reported Q4FY18 earnings above our estimates on the back of lower energy cost and higher earnings in power biz. However, we believe that margins would remain under pressure due to intense competition, accelerating pace of capacity addition and hardening fuel prices. We cut our earnings estimates by 15%/18% for FY19e/FY20e to factor in lower realisations. Though valuations remain stretched; quality operations and strong volume growth (50% increase in capacity by FY20e) would continue to support the valuations.
Outlook
Though valuations remain stretched; quality operations and strong volume growth (50% increase in capacity by FY20e) would continue to support the valuations. We maintain ‘Accumulate’ with revised PT of Rs18,750 (earlier Rs20,150).For all recommendations report, click here
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