Shree Cement Q2 Result Preview: Improved realisations, lower costs likely to aid per tonne profitability

livemint.com:

Q2 Result: Shree Cement likely benefitted from the strong demand during the July-September quarter, as has been the case with its peers. The cement demand from the infrastructure sector remained strong and with monsoon activity remaining weaker than expected, the construction activities overall did not see much slowdown as has been the case historically in the monsoon impacted September quarter. The company will release its quarterly earnings today.

The cement price hikes taken by manufacturers during the quarter is another positive factor that will support Shree Cements profitability. The average cement prices in the country at ₹357 per 50 Kg bag during Q2 had improved from ₹355 per bag in the previous quarter and ₹349 per bag in the year ago quarter. The benefits of softer input costs seen in Q1 will accrue in Q2 and this will be further positive for Shree Cements profitability.

Analysts at Centrum Institutional Research peg Shree Cement’s sales volume coming at 8.4 million tonne (mt) growing 12% year-on-year during the July- September 2023 quarter . Cement realizations at ₹5,489 per tonne are also estimated to grow 8.3% year-on-year. The Earnings before interest tax depreciation and amortisation (Ebitda) per tonne at ₹1,046 is also expected to grow 49.1% year-on-year.

Also Read- ASK Automotive IPO opens today: GMP, review, other details. Apply or not? Analysts at Motilal Oswal Financial Services on the other hand also expect Shree Cement’s sales volume to increase 10% year-on-year to 8.29 mt. With Blended realisations at ₹5,367 a tonne improving 5.8% year-on-year, revenue is estimated to increase 17% YoY to ₹4420 Crore.