India's Shree Cement just misses profit view as higher costs bite into record sales volume

Ultratech Cement

14/05/2025 11:29

May 14 (Reuters) - India's Shree Cement SHCM.NS posted a fourth-quarter profit that fell just shy of analysts estimates on Wednesday, as record sales volumes were outweighed by higher expenses and a bigger tax bill.

The company's net profit dropped about 16% to 5.56 billion rupees ($65.2 million), just below analysts' average expectation of 5.59 billion rupees, per data compiled by LSEG.

In a seasonally strong quarter, Shree Cement's sales volumes hit a record 9.84 million tonnes, lifting revenue by 3% to 52.40 billion rupees, which exceeded analysts' expectations.

However, its total costs rose about 5% to 46.48 billion rupees. Freight costs, which account for a quarter of the total expenses, jumped more than 10%. The company's tax expenses also went up 69%.

For further earnings highlights, click nFWN3RM0FH

KEY CONTEXT

The weather in India during the January-March period is usually favourable for construction activities, which spurs demand for cement. Cement mills typically cash in on this by boosting their volumes.

Prices also began to recover in the past few months, reversing from declines logged for the bulk of last year. However, the average all-India cement price for the January-March quarter was 2% lower on-year, data from brokerage Ambit Capital showed.

As a result, the sector has furnished a mixed bag of results. Market leader UltraTech Cement ULTC.NS missed estimates on soft pricing while strong volumes boosted profits at rival Adani-owned Ambuja Cements ABUJ.NS.

PEER COMPARISON

Valuation (next 12 months)
Estimates (next 12 months)
Analysts' sentiment
RIC
PE
EV/EBITDA
Revenue growth (%)
Profit growth (%)
Mean rating*
# of analysts
Stock to price target**
Div yield (%)
Shree Cement
SHCM.NS
58.31
20.81
15.78
67.68
Hold
17
1.09
0.35
UltraTech Cement
ULTC.NS
36.71
19.84
15.86
46.85
Buy
37
0.91
0.60
Ambuja Cements
ABUJ.NS
38.80
15.48
26.17
-2.54
Buy
34
0.86
0.37
Dalmia Bharat
DALB.NS
34.73
12.14
11.25
32.39
Hold
28
0.99
0.45

 * The average of analysts 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

JANUARY-MARCH STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 85.2625 Indian rupees

SHCM Q4 https://tmsnrt.rs/458iJBy

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Savio D'Souza)

 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))