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Mumbai : Shares of Shree Cement Ltd fell as a lot as 4.71% after it reported a 13.5% drop in consolidated internet revenue at ₹330.35 crore throughout the June quarter of FY21 as towards a revenue of ₹382 crore in the identical interval final 12 months.
At 10:20 am, Shree Cement was buying and selling at ₹21,421.95 down 4.32% from its earlier shut, whereas the benchmark index, Sensex gained 0.76% to 38,471.45.
The firm’s income fell round 24% at ₹2,480 crore, as towards ₹3,302 crore over the past monetary 12 months. Total bills too got here down by 25% at ₹2,163 crore, primarily on the again of decrease uncooked materials prices.
Shree Cement reported 22% YoY drop in earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) to round ₹700 crore, whereas EBITDA per tonne stood at ₹1,422 within the June quarter of FY21.
Analysts at Motilal Oswal in a consequence be aware stated, “Shree Cement’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. A strong balance sheet ₹3,300 crore net cash at FY2020-end and limited capex provide comfort in the current uncertain demand environment on account of covid-19. We value the stock at 16 times FY2022E Enterprise Value on Earnings before interest, tax, depreciation and ammortisation and add the value of the UAE operations at $70 per tonne to arrive at target price of ₹21,500.” The brokerage has a impartial score on the stock.
Shree Cement was capable of offset a number of the hit because of decrease uncooked materials prices. Petcoke costs, a key uncooked materials used to supply cement, have been 40% decrease throughout the quarter. Cement costs had additionally began rising from May as development actions restarted.
Emkay Global Financial Services in a consequence be aware to purchasers stated, “Cement demand recovery has been much better than our estimates and have increased sales volume assumptions by 14.7%/6.6%/5.5% for FY2021/2022/2023. Historically, Shree Cement has been ahead of most of its peers in capacity expansions, which has helped it to gain market share. The company has aggressive growth plans of doubling its capacities in six years, though there has been some delay due to covid-19-led demand disruption. Capex per ton for Shree Cement is much lower than industry peers and believe that the stock will continue to command premium valuations.” The brokerage has a maintain score on the stock.
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