Shares of Shree Cement witnessed a nearly 1 percent decline, trading at Rs 23,799.95 apiece during Tuesday’s late afternoon deals, following news that the Ministry of Corporate Affairs (MCA) has issued an inspection order against the cement manufacturer. Sources have confirmed that the order was issued in response to concerns related to related party transactions, corporate governance matters, and improper income tax filings.
This development comes shortly after the Income Tax (I-T) department conducted survey actions at five locations of Shree Cement in Rajasthan. Such survey actions are investigative procedures aimed at determining the actual income earned by a taxpayer during a financial year. During the survey, the I-T department scrutinized the deductions claimed by Shree Cement under section 80IA, suggesting that these claimed deductions are false.
In response to these reports, the Kolkata-based company has denied any allegations of tax evasion, asserting that they dismiss the details of tax evasion reported thus far. Shree Cement further stated that the Income Tax survey is still ongoing and that their management team is fully cooperating with the officials, providing the required information.
The alleged tax evasion, if substantiated, would mark the largest case of its kind to date. Following the news, shares of Shree Cement experienced a nearly 1 percent decline, with a 7 percent fall in the last month. However, the stock has shown a 2 percent gain on a year-to-date basis.
The company’s 14-day relative strength index (RSI) currently stands at 40, indicating a balanced state. An RSI level below 30 suggests oversold conditions, while a value above 70 is considered overbought. Shree Cement’s stock exhibits very low volatility, with a one-year beta of 0.7.
Among the 45 analysts tracking Shree Cement, 10 have a buy rating on the stock, while 19 recommend holding. On the other hand, 16 analysts advise selling the stock. According to the 12-month Bloomberg consensus, the stock shows a return potential of 3.3 percent.
As the inspection by the Ministry of Corporate Affairs proceeds, investors and industry observers remain watchful of any further developments that may impact Shree Cement’s operations and financial standing.
