Buy Shree Cements, target price Rs 28650: Emkay Global

Emkay Global has buy call on Shree Cements with a target price of Rs 28650. The current market price of Shree Cements Ltd. is Rs 24977. Time period given by analyst is one year when Shree Cements Ltd. price can reach defined target.

Shree Cements Ltd., incorporated in the year 1979, is a Large Cap company (having a market cap of Rs 89565.41 Crore) operating in Cement sector.

Shree Cements Ltd. key Products/Revenue Segments include Cement, Other Operating Revenue, Clinker, Power and Scrap for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 3750.96 Crore, up 6.35 % from last quarter Total Income of Rs 3526.95 Crore and up 2.78 % from last year same quarter Total Income of Rs 3649.38 Crore. Company reported net profit after tax of Rs 482.70 Crore in latest quarter.

Investment Rationale
Factoring in higher input cost inflation, we cut our FY22-24 EBITDA estimates by 8- 13%. The brokerage also reduces fair value EV/EBITDA multiple to 17x from 18x, based on marginally higher WACC/CoE. It rolls forward to Mar'23E from Dec'22, and cuts TP to Rs28,650 (Rs32,250 earlier).

Promoter/FII Holdings
Promoters held 62.55 per cent stake in the company as of 31-Dec-2021, while FIIs owned 13.05 per cent, DIIs 10.5 per cent.