1QFY27: Consol EBITDA beat even as India was largely inline

Research evidence excerpt

Accessible version

Shree Cement

1QFY27: Consol EBITDA beat even as India

was largely inline

Reiterate Rating: UNDERPERFORM | PO: 24,800 INR | Price: 26,055 INR

India inline despite headwinds & strong subs performance

01 August 2026

Shree Cement reported 9% beat on consol EBITDA (Rs12.7bn) aided by near doubling of

its sub revenue - Union Cement + Shree Cement East. Standalone earnings (reflective on

India) saw strong revenue growth aided by 17% volume growth but EBITDA was inline at

Rs10.7bn (Rs1045/MT) due to higher operating costs. We believe the performance in qtr

is strong given the tough macro with unavailability of contracted pet coke and gypsum

supplies impacting clinker conversion ratio. This therefore, disrupted supplies to trade

channel and led to meaningful increase in power costs (+22% QoQ on per MT). Despite

higher non-trade sales in 1Q (48% vs. 29% LY), realization increased 4% QoQ aiding the

revenue beat.

Equity

Operating costs have peaked in 1Q

SRCM pointed that the impact from West Asia conflict on availability of RM/fuel as well

as inflation is reflected in Jun qtr earnings with operating cost per MT likely to remain

stable or moderate from current levels. While 2Q will see the impact from seasonality,

we see scope for better cost environment in 2HFY27 and benefit to realization from

normalization of trade mix to drive higher EBITDA/MT (~Rs1185/MT in 2H). However, we

do expect volume growth to normalize at ~10-11%, which implies volume of 41+MT vs.

guidance of 40MT. SRCM commentary on subs also was strong with doubling of capacity

in Union Cement by 3QFY27 as well as higher growth in East, which should increase

share of subs to 25% over time (vs. ~10% today).

Key Changes

(Rs)

Previous

Current

Price Obj.

24,600.00

24,800.00

2027E EPS

518.16

584.15

2028E EPS

692.08

798.44

2029E EPS

824.39

1,005.36

2027E EBITDA (m)

49,295.4

52,051.9

2028E EBITDA (m)

57,536.8

63,552.7

2029E EBITDA (m)

65,609.7

74,274.0

Neha Manpuria >>

Research Analyst

BofAS India

Charul Agrawal >>

Research Analyst

BofAS India

Valuation key us underperform

While we like Shree’s execution in a tough macro environment, we believe this is priced

…