Shree Cement Q4 Review - In-Line But Valuation Still At Premium: IDBI Capital
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IDBI Capital Report
Shree Cement Ltd.'s Q4 FY21 Ebitda was in-line with our and consensus estimate. The company volume increase at up 19% YoY was strong.
Post the result we have increased Ebitda estimate for FY22E and FY23E by 6% and 11%.
This factors higher average selling price (as Q4 FY21 realization is up 4% QoQ), lower opex/tonne versus earlier estimate for FY22E/23E.
The company's valuation premium to UltraTech Cement Ltd. has narrowed to 35% (from the highs of 80%) versus historical average of 45%.
But expectation of weak H1 FY22 is weighing on us to have positive outlook on the stock.
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