CLSA has maintained a ‘Hold’ rating on Shree Cement with a target price of ₹31,900, following a weaker-than-expected Q1FY26 performance. The company reported a decline in volumes, making it the only large-cap cement player to post a year-on-year drop in dispatches during the quarter.
The stock currently trades at ₹30,590, offering a limited upside from current levels, according to the brokerage.
Volume decline but higher realisations support margins
While volumes were underwhelming, Shree Cement benefited from 4% quarter-on-quarter growth in realisations, which helped partially offset the weakness. The company’s blended EBITDA per tonne stood at ₹1,373, which remains ahead of its large-cap peers.
Strategy: Prioritising margins over market share
CLSA noted that Shree Cement continues to prioritise profitability over aggressive volume growth, a strategy that could result in higher EBITDA/tonne but lower volume expansion compared to other top cement companies.
The brokerage believes this strategic stance will allow Shree Cement to maintain superior margin performance, but may limit near-term growth potential, especially if the broader industry sees an upcycle in volumes.
Brokerage view summary:
| Brokerage | Rating | Target Price | Key Takeaways |
|---|---|---|---|
| CLSA | Hold | ₹31,900 | Q1 below estimates, volume declined YoY, focus remains on profitability over volume |
Disclaimer: This article is based on brokerage reports and is for informational purposes only. It does not constitute investment advice. Investors should consult their financial advisors before making investment decisions.