Shree Cement Reports Q1 FY26 Results; Dolat Capital Adjusts Outlook

Shree Cement Ltd. has released its financial results for the first quarter of FY26, revealing a mixed performance that has prompted Dolat Capital to maintain a ‘Reduce’ rating on the stock. While revenue and EBITDA per tonne met expectations, both volume and EBITDA fell short, although blended realization per tonne and adjusted profit after tax exceeded forecasts.

Dolat Capital’s analysis indicates that Shree Cement’s revenue and EBITDA per tonne align with their estimates. However, the company experienced lower-than-expected volumes and EBITDA. The report highlights that blended realization per tonne and adjusted profit after tax were notably stronger than anticipated.

“We expect revenue, EBITDA, and adjusted profit after tax (APAT) to grow at compound annual growth rates of 7.8%, 21.9%, and 42.4% respectively over FY25 to FY27,” Dolat Capital stated in their report. This growth is anticipated to be driven by a volume increase of 2.0% and a slight decline in blended realization growth of 0.5% in FY27.

The report further notes that EBITDA per tonne is expected to improve from Rs 1,078 in FY25 to Rs 1,437 in FY26E, with projections for Q1 FY26 showing an increase to Rs 1,454. Despite these improvements, Dolat Capital believes that current market prices already reflect expected profitability enhancements.

As a result of this analysis, Dolat Capital has revised its target price for Shree Cement to Rs 29,915, applying a valuation of 17 times FY27E EV/EBITDA, alongside 50% of FY27E capital work in progress and 0.5 times price-to-book value for its UAE subsidiary.

Investors are advised to consult financial experts before making any investment decisions, as the information provided in Dolat Capital’s report reflects the views of the authoring entity and does not represent the opinions of NDTV Profit.

In summary, Shree Cement’s Q1 FY26 results illustrate a complex picture of steady revenue against challenges in volume and EBITDA performance. The adjustments made by Dolat Capital reflect a cautious outlook as the company navigates its growth trajectory in the coming years.