Shree Cement Q4 Review – Lower Pricing Impacts Ebitda; Costs Remain In Control: Nirmal Bang

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Shree Cement Ltd. reported relatively weak numbers for Q4 FY22 with reported Ebitda coming in at Rs 9.1 billion, down 23% YoY and 14% below our estimate.

Key reason for lower Ebitda is weak pricing as most other operational parameters like volume and costs were better than expected.

Despite the miss on Ebitda, Shree Cement’s Ebitda/million tonne of Rs 1,134 is likely to be one of the highest in the industry.

Overall, volume growth for FY22 at just 3% is a miss on expectations and we expect the same to pick up over the next two years.

We are building in ~15% volume compund annual growth rate for the company on account of its expansion in East and West, which we believe is a tad optimistic.

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