Shree Cement's Q4 profit almost doubles QoQ, stock gains; what should be your strategy?

Shree Cement shares were in demand during Tuesday’s session on the back of stellar earnings on a sequential basis for the quarter that ended on March 31, 2023. The stock rose as much as 4 per cent to touch the day’s high level of Rs 25,426.25 during the early morning session on the BSE today.

On a sequential basis, the company’s profit almost doubled and EBITDA jumped 26 per cent, as per the company’s regulatory filing on Monday.

On a year-on-year basis, Shree Cement’s net profit declined by 15 per cent to Rs 546 crore for the final three months of the fiscal year 2022-23 as compared to Rs 645 crore in the same quarter last year. The cement major’s sales grew by 17 per cent year-on-year to Rs 4,785 crore as against Rs 4,099 crore logged in the corresponding quarter last year.

The company said, “Proportion of premium products sale against total trade cement sale was 7.5 per cent in Q4FY23 versus 7.2 per cent of Q3FY23, while Total sale volume increased QoQ by 10 per cent from 8.03 million tonnes to 8.83 million tonnes.”

“We continue to execute sharp action plans to reach beyond 80 million tons cement capacity in the coming years,” Shree Cement, MD, Neeraj Akhoury said in his earnings commentary.

Akhoury added, “We are driving prioritised initiatives to increase green power, usage of alternative fuels, process automation combined with advanced digitalisation of the operations to deliver superior performance.”

Global brokerages are positive on Shree Cement as Morgan Stanley maintained an ‘equal-weight’ rating with Rs 25,600 per share and Jefferies has retained a ‘hold’ call with a target of Rs 22,250 per share on the stock.  

Shree Cement shares in the last one year have gained nearly 15 per cent as compared to a 14 per cent rise in the Nifty50 index.