Shree Cement - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 27,622; MCap: Rs. 99,664 crore)

Shree Cement's operational performance for Q4FY21 remained ahead of our estimates led by improved sales volumes and better realisations.

Q4FY21 Earnings Summary

- Revenue for the quarter grew 22.2% YoY to Rs. 3,930.8 crore (vs. I-direct estimate of Rs. 3,817.7 crore). Volumes grew by 18.8 YoY to 8.21MT, blended realisations also increased 2.8% YoY, 3.6% QoQ to Rs. 4,788/t (vs. I-direct estimate of Rs. 4,650/t)

- On the cost front, blended costs per tonne of cement were at Rs. 3354 (vs. I-direct estimate of Rs. 3,007/t), up 8.4% YoY, 8.2% QoQ despite due to higher freight (up 12.2% YoY to Rs. 1160/t) & other costs (up 13.7% YoY to Rs. 743/t)

- EBITDA for the quarter increased by 9.1% YoY to Rs. 1,177.2 crore, driven by sales volumes and better realisations despite higher cost of production. It remained above our estimated EBITDA of Rs. 1089 crore. Blended EBITDA/t for Q4FY21 came in at Rs. 1,434/t, down 8.2% YoY (vs. I-direct estimate of Rs. 1,326/t)

- Other income were higher by 27.2% to Rs. 106.8 crore which could have been led by increase in the short term investments as recent fund raising through QIP have not been deployed fully towards any capex yet. This along with the fall in depreciation charge (down 31.4% YoY to Rs. 299.3 crore) led to company reporting better than estimated net profit of Rs. 767.7 crore (up 30.5% YoY) vs I-direct estimated PAT of Rs. 626.2 crore

During the quarter, the company managed to maintain better than expected EBITDA margins despite rise in key input costs like freight and other costs. In terms of demand, we expect the outlook to remain firm for FY22E as the sector is likely to witness improved demand not only from infra and construction but from real estate as well due to improved affordability and lower interest rates. We will be coming out with detailed update soon.

Shares of SHREE CEMENT LTD. was last trading in BSE at Rs.27620 as compared to the previous close of Rs. 27522.6. The total number of shares traded during the day was 1490 in over 754 trades.

The stock hit an intraday high of Rs. 27970 and intraday low of 27535.45. The net turnover during the day was Rs. 41433578.

Source : Equity Bulls

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