India's Shree Cement beats Q2 profit view on higher-than-expected volume growth

Shree Cement

11/11/2024 11:40

Nov 11 (Reuters) - India's Shree Cement  SHCM.NS  topped second-quarter profit estimates on Monday, as
higher-than-expected sales volumes helped mitigate low prices of the key construction material.
    The country's third-biggest cement maker by market capitalisation reported a net profit of 931.3 million rupees ($11
million) for the three months ended Sept. 30, down 81% from year-ago. 
    Analysts were expecting a profit of 765.8 million rupees, per data compiled by LSEG.
    Revenue from operations fell 18% to 37.27 billion rupees, but was below analysts' average estimate of 38.91 billion
rupees. 
    For further earnings highlights, click here  urn:newsml:reuters.com:*:nFWN3MI0D4
        
KEY CONTEXT
    Shree Cement logged a volume growth of 7% in the quarter, less than the 10% it logged in the year-ago quarter, but
stronger than estimates of four analysts, who were expecting 8% drop to 3% growth. 
    Cement makers struggled with prices hitting a five-year low and demand failing to recover from the June quarter,
when elections had slowed construction and other infrastructure activities. 
    However, the companies were upbeat about demand in the long run.
    Last month, market leader UltraTech Cement  ULTC.NS  flagged early signs of a price recovery after reporting a sharp
drop in second-quarter profit and first revenue decline in four years.
    UltraTech's smaller rivals ACC  ACC.NS  and Ambuja Cements  ABUJ.NS  both saw higher-than-expected volume growth.
    
PEER COMPARISON 
                                  Valuation (next 12     Estimates (next 12    Analysts' sentiment              
                                  months)                months)                                                
                      RIC         PE     EV/EBITDA       Revenue     Profit    Mean     No. of   Stock to       Div
                                                         growth      growth    rating*  analyst  price          yield
                                                                                        s        target**       (%)
 Shree Cement          SHCM.NS    38.18  16.65           8.34        9.58      Hold     16       0.92           0.43
 UltraTech Cement      ULTC.NS    44.37  20.21           11.07       22.38     Buy      35       0.94           0.63
 ACC                   ACC.NS     21.04  11.07           7.46        10.61     Buy      20       0.86           0.33
 Ambuja Cements        ABUJ.NS    33.13  16.55           16.22       23.13     Buy      30       0.87           0.35
 
    
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
    
JULY-SEPTEMBER STOCK PERFORMANCE 

    
-- All data from LSEG
-- $1 = 84.3570 Indian rupees

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Shree Cement Q2    https://tmsnrt.rs/4hF6Eb0
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 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Varun H K and Mrigank Dhaniwala)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))