KR Choksey's research report on Shree Cement
In Q4FY22, Shree Cement’s revenue grew 3.1% YoY/20% QoQ to INR 43,642 mn, surpassing our estimate by 7.2%. For FY22, revenue grew 10.7% YoY to INR 150,096 Mn. For Q4FY22, EBITDA has seen a decline of 26.3% YoY to INR 9,188 mn, though on QoQ basis EBITDA grew by 8.7%. EBITDA margin also suffered contraction to the tune of 837 bps YoY and 219 bps QoQ to 21.1%. For FY22, EBITDA saw a decline of 9.1% YoY to INR 37,079 Mn, while EBITDA margins declined by 538 bps to 24.7%. • Reported PAT for Q4FY22, has seen a growth of 36.4% QoQ to INR 6,572 mn, though on YoY basis PAT suffered a decline of 17.7%. PAT margin expanded by 181 bps YoY to 15.1%. However, on YoY basis, margin suffered a contraction of 379 bps. For FY22, PAT saw a muted growth of 2% YoY to INR 23,319 Mn while PAT margins contracted by 132 bps to 15.5%.
Outlook
At CMP of INR 21,942, the stock is trading at FY23E/FY24E EV/EBITDA of 17.9x/15x. We continue to value the stock at 16x its FY24E EV/EBITDA, which yields a target price of INR 25,085 (previous TP of INR 27,978), giving an upside potential of 14.3% from the CMP. Accordingly, we maintain our “ACCUMULATE” rating due to correction in stock price.
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