Related
Axis Securities has hold call on with a target price of Rs 30000. The current market price of Shree Cements Ltd. is Rs 28800. Time period given by analyst is one year when Shree Cements Ltd. price can reach defined target. Shree Cements Ltd., incorporated in the year 1979, is a Large Cap company (having a market cap of Rs 103318.12 Crore) operating in Cement sector.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 3526.95 Crore, down -6.59 % from last quarter Total Income of Rs 3775.94 Crore and up 5.18 % from last year same quarter Total Income of Rs 3353.33 Crore. Company reported net profit after tax of Rs 563.94 Crore in latest quarter.
Investment Rationale
The company’s capacity expansion plan is on track. Furthermore, it is strongly positioned in its key markets of the North and East region which are expected to exhibit an encouraging growth supported by higher cement demand in the region. The company outlook appears robust with a strong position in the demand-accretive North and East region, new capacity addition, and higher sale of high-margin premium products. Furthermore, a significant pick-up in infrastructure activities backed by the National Infrastructure Pipeline (NIP) is likely to see better traction with new project awards in the medium to long term, which would accelerate cement demand further. However, the stock is currently trading at 18x of FY23E EV/EBITDA which provides little upside from the current levels. Hence the brokerage maintains HOLD rating on the stock. It values the company at 19x of its FY23E EV/EBITDA to arrive at a target price of Rs 30,000/share, implying an upside of 5% from CMP.
Promoter/FII Holdings
Promoters held 62.55 per cent stake in the company as of 30-Sep-2021, while FIIs owned 13.53 per cent, DIIs 10.1 per cent.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 3526.95 Crore, down -6.59 % from last quarter Total Income of Rs 3775.94 Crore and up 5.18 % from last year same quarter Total Income of Rs 3353.33 Crore. Company reported net profit after tax of Rs 563.94 Crore in latest quarter.
Investment Rationale
The company’s capacity expansion plan is on track. Furthermore, it is strongly positioned in its key markets of the North and East region which are expected to exhibit an encouraging growth supported by higher cement demand in the region. The company outlook appears robust with a strong position in the demand-accretive North and East region, new capacity addition, and higher sale of high-margin premium products. Furthermore, a significant pick-up in infrastructure activities backed by the National Infrastructure Pipeline (NIP) is likely to see better traction with new project awards in the medium to long term, which would accelerate cement demand further. However, the stock is currently trading at 18x of FY23E EV/EBITDA which provides little upside from the current levels. Hence the brokerage maintains HOLD rating on the stock. It values the company at 19x of its FY23E EV/EBITDA to arrive at a target price of Rs 30,000/share, implying an upside of 5% from CMP.
Promoter/FII Holdings
Promoters held 62.55 per cent stake in the company as of 30-Sep-2021, while FIIs owned 13.53 per cent, DIIs 10.1 per cent.
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