Shree Cement: Adverse volume mix weighs on performance Quick Note

Research evidence excerpt

Shree Cement: Adverse volume mix weighs on performance Quick Note

Global Markets Research

Shree Cement SHCM.NS SRCM IN 31 July 2026

EQUITY: CONSTRUCTION MATERIALS

RatingAdverse volume mix weighs on performance Remains Buy

Target price INR 28,000 RemainsQuick Note

Closing price INR 26,055 31 July 20261QFY27 results: Non-trade dominated volume mix leads to EBITDA miss

• 1QFY27 standalone EBITDA of INR10.75bn missed both our/Bloomberg forecasts by

5% each. The miss in EBITDA vs our estimate was primarily driven by lower blended Research Analysts

realizations. India Construction Materials

• Total volumes of 10.49MT, up 17% y-y, were largely in line with our estimate of Jashandeep Singh Chadha - NFASL

10.3MT, led by strong performance in the South and North regions. Notably, Shree's jashandeep.singhchadha@nomura.com

volume improvement was among the industry's strongest, reported so far in 1Q (Fig.3 +91 22 40374124

).

• The volume mix, however, was tilted towards non-trade from trade, with the trade mix

falling to 62% vs 71% in 1QFY26. Management highlighted the West Asia crisis, and

the consequent shift to low-quality coal pushed the conversion factor down to 1.5x (vs.

1.58x in 1QFY26) resulting in greater OPC (Ordinary Portland Cement) production

and lower trade volumes.

• As a result, Shree reported flat q-q growth of blended realizations, 4% below our

estimate. The decrease in realizations was primarily due to an unfavorable mix shift.

• Due to the West Asia crisis, management highlighted that petcoke and Oman gypsum

shortages necessitated costlier, low-quality coal and domestic gypsum substitutes.

• Fuel cost averaged INR1.95/Kcal in 1Q, which the company views as peak levels, and

management expects costs to stabilize or decline in 2QFY27E if the Middle East