Shree Cement Q1: Profit nearly doubles, analysts stay cautiously optimistic

Shree Cement Q1 review: India’s third largest cement group by capacity, Shree Cement, reported a strong set of financials for the quarter ended June 30, 2025, with profitability soaring even as volumes moderated. 

 

The company’s net revenue rose 2 per cent year-on-year (Y-o-Y) to ₹4,948 crore, while operating profit (Ebitda) surged 34 per cent Y-o-Y to ₹1,229 crore. Profit after tax nearly doubled, rising 95 per cent Y-o-Y to ₹619 crore from ₹318 crore, and cash profit grew 24 per cent to ₹1,161 crore.

 

Brokerages offered a mixed yet constructive view on Shree Cement 's Q1 performance, highlighting improved realisations, expanding margins, and long-term growth plans.

 

In line with estimates, beat on PAT

 

Motilal Oswal Financial Services said Shree Cement’s operating performance in Q1FY26 was largely in line with expectations. “Ebitda increased ~34 per cent Y-o-Y to ₹1,230 crore and Ebitda/tonne rose ~44 per cent Y-o-Y to ₹1,373 (estimate of ₹1,325),” it noted. Operating margins expanded by 590 basis points (bps) Y-o-Y to 25 per cent.

 

The brokerage highlighted a sharp 95 per cent Y-o-Y rise in PAT to ₹620 crore, beating estimates by 39 per cent due to “lower depreciation and higher other income than expected.” Thus, MOFSL maintained a 'Neutral' rating with a target price of ₹33,000, stating that the stock trades fairly at 21x/18x FY26E/FY27E EV/Ebitda.

 

Realisation-focused strategy; Q1 Ebitda miss

 

Nuvama Institutional Equities said the company continued to prioritise realisation over volume. Volumes fell ~7 per cent Y-o-Y, while blended realisation improved 4 per cent Q-o-Q and 10 per cent Y-o-Y. However, it flagged a miss on Ebitda, which came in at ₹1,229 crore – around 10 per cent below its estimate. Ebitda/tonne stood at ₹1,373.

 

“Capex plans and cost efficiencies will help maintain industry-leading margins,” the brokerage said, maintaining a ‘Hold’ rating with a slightly revised target price of ₹30,873 (from ₹30,807).

 

Maintain Buy; TP hiked

 

Jefferies reportedly retained its ‘Buy’ rating and raised the target price to ₹35,150 from ₹34,000. “Slight miss on Q1 Ebitda was driven by weaker volumes, but unit Ebitda was ahead due to strong realisations,” it said. The brokerage added that Shree Cement continues to favour profitability over volume growth.

 

Operational highlights

 

Shree Cement’s total sales volume during the quarter stood at 89.5 lakh tonnes. Premium products contributed 17.7 per cent to trade sales, improving from 15.6 per cent in Q4FY25.

 

In its UAE operations, the company posted a strong performance. Revenue grew 19 per cent Y-o-Y to AED 181.19 million, while Ebitda surged 397 per cent to AED 44.86 million from AED 9.02 million. 

 

The company’s subsidiary Union Cement Company has announced a 3 MTPA capacity expansion with an investment of AED 110 million, anticipating robust demand.

 

Cement sector outlook

 

Shree Cement’s management reiterated its optimistic outlook for the industry. “Industry demand is expected to grow by 6-7 per cent in FY26, aided by strong government capex, rural housing demand supported by good monsoons, and growing industrial activity,” noted Motilal Oswal.

 

To capitalise on demand, Shree Cement commissioned two new grinding units in April 2025 - 3.4 MTPA in Baloda Bazar, Chhattisgarh, and 3 MTPA in Etah, Uttar Pradesh – taking its total capacity to 62.8 MTPA. It has reiterated its target of reaching 80 MTPA capacity by FY28.

 

While Q1 saw some volume softness, analysts agree that Shree Cement’s margin-focused approach, strategic capacity additions, and improving international performance position it well for sustainable growth.