[ad_1]
MUMBAI: Shares of pan-India focussed Shree Cements Ltd fell greater than 4% to ₹21,424 on the National Stock Exchange in opening commerce on Tuesday. This was principally in response to the corporate’s earnings for the June quarter, which largely disenchanted.
Cement gross sales volumes fell 19% year-on-year to 4.93 million tonnes within the June quarter. Even although the decline was decrease than the business’s 30-35% fall, it was largely as a result of a relatively low base helped Shree Cements. Also, development in realisations was flat sequentially within the June quarter.
What’s extra, Shree Cements Ltd did not see a discount in its working prices not like its peers.
An evaluation by Reliance Securities Ltd confirmed that the working cost on a per tonne foundation for the corporate rose 7% sequentially. This may have been a fallout of the rise in firm’s freight cost/tonne, which rose practically 10% quarter-on-quarter. In comparability, peers ACC Ltd, Ambuja Cements, and Ultratech Cement noticed a 2% sequential fall in working cost/tonne within the June quarter.
Analysts warning of challenges associated to near-term margins for Shree Cements on the again of elevated working cost and muted cement costs in its key markets.
The firm’s administration has mentioned demand outlook for the cement sector stays unsure for now and therefore it is going to doubtless steer clear of giant capital expenditures till the consumption situation improves. It must be famous that the corporate goals to double its capability in east India.
“While SRCM’s home market of northern India remains better placed (due to consolidated market structure and lower capacity additions), its increasing exposure to the eastern region is expected to result in blended margin decline. The eastern region is likely to witness ~30% capacity expansion by various players (including SRCM) over the next 18 months. This is likely to lead to a battle for market share in a weak demand environment,” brokerage agency Motilal Oswal Securities Ltd mentioned in a report on 11 August.
Shree Cements’ shares at the moment are about 14% decrease from its pre-covid highs, roughly in keeping with the drop in shares of Ultratech. Shares of Ambuja Cements have risen above their pre-covid-highs, whereas shares of ACC are down about 10%.
[ad_2]
Source hyperlink