Shree Cement Q4FY21 Results: Misses street expectations – Check what JP Morgan, Goldman Sachs have to say

Missing the street estimates in the fourth quarter of FY21, the brokerage firm downgrades the stance for Shree Cement. The cement firm on Friday reported a rise of over 30 per cent in the net profit of Q4 for the financial year 2020-2021. 

The company’s profit increased to Rs 767.6 crore in Q4 FY21 as compared to Rs 588.1 crore in the corresponding period of FY20. 

In this regard, Nomura maintains Reduce rating on Shree Cement, degrading the target at Rs 26,500 per share. The brokerage firm mentioned that quarter-four in-line, however, higher staff costs impact margin, similarly, volumes in-line but blended realisations are higher. 

Nomura said, quarter one volumes may be impacted by lockdowns and margin by rising input costs.  

Similarly, Goldman Sachs also maintained a Neutral call on Shree Cement, with a target of Rs 28,070 per share. The stock is currently trading down over two percent at Rs 27000 apiece. 

The brokerage firm said, volume growth lagged larger peers, however, the base was stronger. P&F costs came in below Goldman Sachs' expectations. It also expects, profitability to be impacted in the coming quarters. 

The standalone revenue of the company grew by 22.2 percent to Rs 3,930.8 crore in the March-ended quarter year-on-year basis, the company said in its filing to exchanges. 

Shree Cement declared a final dividend of Rs 60 per share for the year ended March 2021. 

The company reported Employee cost at Rs 244.24 crore in Q4 FY21 increased by 44.5 per cent over Rs 169.07 crore in Q4 FY20 due to increments impact, Shree Cement said. 

The standalone EBITDA (earnings before interest, tax, depreciation, and amortisation) of Shree Cement jumped by 9.1 percent to Rs 1,177.2 crore, however, margin dipped 350 bps to 30 percent compared to the year-ago quarter 

The stock opened at day’s high today at around Rs 27790 per share as compared to Rs 27608 per share on Friday’s close.