Shree Cement Maintains Neutral Outlook, Target Price Set at Rs 26,000 by Motilal Oswal

Motilal Oswal Maintains Neutral Rating on Shree Cement

Shree Cement's (SRCM) fourth quarter (4QFY26) operating performance was in line with the expectations of Motilal Oswal's research team. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) declined by approximately 11% year-over-year (YoY) to INR12.5 billion. This decline was primarily due to cost pressure. Additionally, EBITDA per tonne (t) decreased by 19% YoY to INR1,161, which was slightly lower than the estimated INR1,139. The operating profit margin (OPM) contracted by 4.8 percentage points (pp) YoY to approximately 22%.

The adjusted profit after tax (PAT) declined by approximately 8% YoY to INR5.3 billion, which was in line with the research team's expectations. Despite this decline, Motilal Oswal maintained its earnings estimates for the fiscal year 2027 (FY27) and fiscal year 2028 (FY28). The company's valuations are considered fair, with an enterprise value to EBITDA (EV/EBITDA) multiple of 17x for FY27 and 14x for FY28.

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Shree Cement's valuations are considered fair, with an enterprise value to EBITDA (EV/EBITDA) multiple of 17x for FY27 and 14x for FY28. Motilal Oswal reiterates its Neutral rating on the company with a target price (TP) of INR26,000, based on an EV/EBITDA multiple of 16x for FY28.