ICICI Direct has given Buy recommendation for Shree Cement with a target price of Rs. 34500 in its research report issued on Nov 02, 2021

ICICI Direct’s research report on Shree Cement

Shree is the third largest cement group in India with domestic cement capacity of 43.4 MT as of FY21. In the past four years, it has diversified itself from being a 100% north player to a player with capacities now in Rajasthan, Uttarakhand, Bihar, Chhattisgarh, Haryana, Uttar Pradesh, Karnataka and Odisha. It also has a presence in UAE with integrated cement capacity of 4 MT and 3.3 MT clinker (located near port in Ras-Al-Khaimah) Proximity to end user market, use of split grinding units and power capacity of 742 MW (Including 211 MW WHRS) makes it most efficient player in the industry

Outlook

With volume led expected revenue CAGR of 18.7% and expected RoCE of 20%+, we remain positive on the company. Hence maintain BUY rating We value Shree at Rs34,500 i.e.22x FY23E EV/EBITDA

 

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