Shree Cement is poised to solidify its status as the top player in unitary Ebitda within the cement industry. Recently, Nomura has made a noteworthy upgrade to Shree Cement Ltd.’s stock rating, elevating it from ‘neutral’ to ‘buy’ and adjusting its price target to Rs 34,000—a significant jump of 21% from the earlier target of Rs 28,000. This upgrade is indicative of the company’s robust recovery in key markets, particularly in North and East India, which together contribute over 80% of Shree Cement’s sales.

Strong Market Performance

According to Nomura, these regions are exhibiting impressive price resilience, which has greatly enhanced the company’s profitability and market standing. The report highlights that:

• Pricing in North and East India has surged by 4% quarter-on-quarter.
• In contrast, the average price increase across the rest of India was only 2%.

This pricing strength is expected to elevate utilization rates, thereby bolstering market share and revenue growth for Shree Cement.

Positive Earnings Outlook

The brokerage has adjusted its Ebitda forecasts for financial years 2026 and 2027, increasing estimates by 9% and 15%, respectively. This optimistic outlook is attributed to soaring cement prices and effective cost management strategies. As a result, Shree Cement is set to maintain its reputation as the industry leader in unitary Ebitda, further entrenching its profitability.

Growth Projections

Nomura anticipates Shree Cement will achieve a 10% compound annual growth rate in volume from financial years 2025-2027, outpacing the industry’s projected 7% growth. The company’s focus on maximizing asset efficiency, especially in the North and East regions, will be pivotal for driving this growth, aided by ongoing capacity expansions.

Expectations for Q4 Performance

Looking ahead to the fourth quarter of this financial year, Nomura predicts that Shree Cement’s Ebitda could surpass Rs 1,300 per tonne, supported by improved realizations and effective fuel cost management. They also expect a 5% year-on-year growth in volume, reinforcing a positive earnings trajectory for the company.

In summary, Shree Cement is on a promising path, bolstered by strategic pricing and strong market recovery, making it a standout choice for investors in the cement sector.