Good show by Shree Cement amid cost pressures should ease Street's concerns

Analysts say power costs are likely to have peaked out, while easing of axle norms and railway rebate should lower transportation costs

In a seasonally soft period impacted by monsoon and amid cost pressures, Shree Cement reported better-than-expected profitability for the September quarter (Q2). This should ease the Street's concerns as cement realisations are likely to improve after the festive season as demand momentum remains healthy. The stock, which fell to its 21-month lows last month, has since risen 14 per cent and should see more gains with improving profitability.   

Revenues at Rs 25.87 billion were up 20 per cent year-on-year and came ahead of Bloomberg consensus estimates of Rs 25.28 billion. Cement volume growth remained strong, growing 15.6 per cent