Shree Cement gains on commencement of new cement grinding unit

The stock has moved higher by 4% to Rs 17,550 on BSE in noon deal after the company announced that it has commissioned new cement grinding unit in Rajasthan.

Shree Cement has moved higher by 4% to Rs 17,550 on BSE in noon deal after the company announced that it has commissioned new cement grinding unit in Rajasthan.

“The Company has commissioned new cement grinding unit (namely Bangur Cement Unit) having capacity of 3.60 MTPA at Village Rohi Udaipur Udasar, District Sriganganagar in Rajasthan,” Shree Cement said in a regulatory filing.

Since January 11, post December 2017 quarter (Q3FY18) results, the stock of Shree Cement had underperformed the market by falling 14%, as compared to 0.06% rise in the S&P BSE Sensex.

The company recorded a flat operating performance in Q3FY18, which was impacted due to increase in energy and freight costs.
 

“Increase in operating costs has hurt Shree Cement’s financial performance in past 3-4 quarters, driving earnings downgrades. However, in that perspective, the stock has also seen time correction over past 12-15 months,” analysts at Antique Stock Broking said in result review.

Shree Cement is amid a series of capacity expansions expected to materialize over next 12-18 months, potentially taking its capacity to 40MT+ by FY19end in domestic market. We believe with the capacities in place, Shree Cement’s offers strong EBITDA growth outlook (with a healthy balance sheet and return profile) and the ability to scale-up volume, if demand surprises on the upside, it added.

At 01:37 PM; the stock was trading 3% higher at Rs 17,372 on BSE, as compared to 0.35% rise in the S&P BSE Sensex. A combined 10,279 equity shares changed hands on the counter on BSE and NSE.