Buy Shree Cement; target of Rs 19600: Sharekhan

Sharekhan’s research report on Shree Cement

We upgrade our rating on Shree Cement Limited (Shree Cement) to Buy with unchanged price target (PT) of Rs. 19,600. Earnings boosted by healthy volume, realisation and lower depreciation. Cement segment affected by higher power and freight costs; Power segment affected by lower volumes y-o-y. Incremental capacity to sustain revenue growth during FY2019-FY2020.

Outlook

We have fine tuned our earnings estimates for FY2019 and FY2020. Shree Cement is likely to benefit from its expansion plans, with improving volume growth outlook while also maintaining its operational performance, being the lowest cost producer. Hence, we upgrade our rating to Buy with unchanged price target (PT) of Rs. 19,600.

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