Shree Cements share prices were down by 4% on Tuesday, due to poor operating performance in Q1, LiveMint reported. The company reported an increase of 48.31% in net sales, which stands at Rs 3,449.49 crore in June 2021. In June 2020, the net sales were Rs. 2,325.79 crores.
According to LiveMint, Shree Cement lagged behind peers in terms of volume growth in the June quarter, with UltraTech Cement Ltd, Ambuja Cement, ACC Ltd delivering 47%, 53%, 44% respectively.
“Shree aims to achieve 80mt capacity by 2030 (7% CAGR) from 43mt in March 2021, indicating that its goal of doubling the capacity in five-seven years is progressing at a slower pace than its earlier guidance. Our current forecasts imply 9% capacity CAGR over FY21-26E and 6.5% thereafter,” Analysts at Emkay Global Financial Services Ltd told LiveMint. CAGR is short for compounded annual growth rate.
As reported by LiveMint, analysts at Motilal Oswal Financial Services Ltd pointed out that due to delayed expansions, a low dividend is likely to result in an increase in cash piles to Rs12,600 crore in FY23 from Rs8,500 crore in FY21, which would keep return on equity subdued.
According to Bloomberg Quint, in the quarter ended in June, the net profit of the cement maker fell 13.8% sequentially to Rs 661.7 crore. While the outlook for cement makers in northern India is strong, the company’s rising exposure to the east, which is already dealing with an over-supply situation, would keep prices muted, resulting in weaker margins, analysts caution, LiveMint reported.
