(Reuters) -India’s Shree Cement reported a 15% rise in quarterly revenue on Tuesday, beating expectations in a seasonally weak quarter, due to higher prices and better-than-expected volume growth.
The company’s revenue from operations rose to 43.03 billion rupees ($489.6 million) in the July-September period, surpassing analysts’ average expectation of 42.23 billion rupees, per data compiled by LSEG.
Volumes rose 6.8% from last year – when there was a lull of new construction orders – coming in above the 2.6%-5.8% growth range expected by at least five brokerages.
While net profit almost tripled to 2.77 billion rupees, it missed estimates as expenses climbed 5% on accounts of fuel, freight and input costs.
For further earnings highlights, click here.
KEY CONTEXT
The July-September quarter is seasonally weak for India’s construction sector due to monsoon rains. However, this year, higher demand that pushed up volumes above expectations and a recovery in prices – nearly 5% on-year, according to Ambit Research – led to a jump in the company’s topline.
Cement prices had corrected in 2024 from the highs of 2023, as demand took a hit due to a drought of new projects exacerbated by India’s general elections.
Analysts also predict cement demand to stay strong in the second half of fiscal year 2026, supported by tax cut-spurred improvement in buyer sentiment.
Earlier this month, sector leader UltraTech Cement reported a 75% rise in quarterly profit.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean # of Stock to Div
growth growth (%) rating* analysts price yield
(%) target** (%)
Shree 45.97 17.69 9.67 39.90 Hold 20 0.91 0.38
Cement
Ltd
UltraTech 34.30 19.34 13.28 34.31 Buy 37 0.88 0.65
Cement
Ltd
Ambuja 31.95 14.78 19.01 10.72 Buy 38 0.85 0.36
Cements
Ltd
Dalmia 28.41 11.59 9.86 29.29 Hold 34 0.87 0.43
Bharat
Ltd
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.8950 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman)
