ICICI Securities Maintains Buy Rating on Shree Cement, Targets Rs 26,200

Shree Cement Delivers Resilient Performance in Q4FY26, but Outlook Remains Cautious

Shree Cement (SRCM) has reported a robust performance in Q4FY26, with its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surging 45% quarter-over-quarter (QoQ), outpacing ICICI Securities' estimates by 18%. Despite this, the company's EBITDA saw a decline of 9% year-over-year (YoY).

The company's volumes accelerated by more than 9% YoY, even as cement realisations grew 1.6% QoQ. Notably, Shree Cement's blended EBITDA per tonne (t) for FY26 remains among the best in the industry, at INR 1,153, albeit slightly lower than the Q4FY26 figure of INR 1,161.

The management's confidence in maintaining its market lead is understandable, given its strong performance. However, several concerns persist. The addition of ~183 million tonnes per annum (mtpa) of industry capacity over FY26-28, with ~43% concentrated in north/central India - Shree Cement's key markets - is likely to intensify competition. Furthermore, the impact of higher global crude oil prices and the depreciation of the Indian rupee (INR) may also weigh on the company's performance.

Read also: Expert Portfolio Manager Raja Venkatraman Names Top Investment Picks for June 4

ICICI Securities Maintains 'HOLD' Recommendation

Given the sector concerns, ICICI Securities prefers to stay on the sidelines. The research firm has retained its 'HOLD' recommendation for Shree Cement, with a target price of INR 26,200 unchanged.