Shree Cement hits 52-week high; soars 15% in 3 weeks on good Q3 results

The management expects cement demand to grow on the back of likely increase in rural consumption aided by improved farm cash flows and sustained healthy demand for urban housing.

Shares of Shree Cement hit a 52-week high of Rs 28,734, up 2 per cent on the BSE in Thursday’s intra-day trade on the back of healthy outlook. The stock surpassed its previous high of Rs 28,650 touched on July 16, 2024.

 

Since January 27, within three weeks, the market price of Shree Cement appreciated by 15 per cent after the company reported a good set of numbers for the quarter ended December 2024 (Q3FY25). Thus far in the calendar year 2025, Shree Cement has rallied 12 per cent, as compared to 2.4 per cent decline in the BSE Sensex.

 

In Q3FY25, total sale volumes rose by 15 per cent from 7.60 million tonnes to 8.77 million tonnes on quarter-on-quarter (QoQ) basis. Earnings before interest, tax, depreciation and amortization (EBITDA) jumped to Rs 947 crore from Rs 593 crore on QoQ basis. The company’s profit after tax (PAT) more-than-doubled to Rs 229 crore from Rs 93 crore in Q2FY25. Net revenue from operations grew 14 per cent QoQ at Rs 4,235 crore.

 

The management expects the cement demand to grow on the back of likely increase in rural consumption aided by improved farm cash flows, sustained healthy demand for urban housing and expected increase in government spending on infrastructure projects. This augurs well for the cement industry going forward. The company is on track to add massive 15.4mn mt capacity by Q1FY26, which is 28 per cent of its existing capacity.

 

Analysts at Centrum Broking expect the ramp-up of these capacities to be gradual and believe that better volume prospects in FY26 augur well for Shree Cement to increase utilization of these assets. The brokerage firm maintains its positive stance on the company and believes that Shree Cement will be a beneficiary of recent hikes in Non-trade segment in North and East.

 

Higher exposure to North and East regions coupled with cost-cutting measures is likely to result in healthy growth in EBITDA/mt for Shree Cement. Despite heavy capex of Rs 4,000 crore plus for the next four years, the brokerage firm expects the balance sheet to remain healthy.

 

Shree Cement reported EBITDA/t in Q3FY25 was higher than estimates, led by better cost control (reduction in other expenses and lower fuel consumption cost). The company’s strategy of prioritizing premium, high-value products, coupled with a sharp focus on brand enhancement, strengthening the dealer network, and optimizing the geo-mix, has enabled it to improve sale volumes QoQ. Additionally, its premium product share stood at 15 per cent (+10bp QoQ). Shree Cement continues to be one of the least cost producers in the industry, Motilal Oswal Financial Services said in the result update.

 

Analysts at Choice Equity Broking anticipate cement demand to grow, driven by an expected rise in rural consumption supported by improved farm cash flows, sustained strong demand for urban housing, and increased government spending on infrastructure projects. These factors create a favorable outlook for the cement industry in the coming years.