Shree Cement will report Q2 results on Friday. The stock is outperforming in trade but in terms of expectations, the Street is working with growth of around 7.50 percent in the topline.

Expect EBITDA to contract by around 17 percent and margin to get compressed to around the 25-26 percent mark. On year-on-year (YoY) basis, it compares with a number in excess of around 30 percent. Profitability should be around Rs 480-500 crore.

The key factors at play will be the revenues and what contributes to that is primarily the realisations. Volumes are expected to be more or less flattish at around 6.50 million tonnes. That is because they have exposure to East India and demand was hit because of monsoons and various other disruptions. So, volumes from East India will not contribute in a big way. As a result, the Street is working with a flattish volume number.

However, realisations on YoY basis are higher, though on a sequential basis there has been some pressure out there. So, on YoY basis, realisations could be higher by around 5 percent.

Margins will get impacted. No operating leverage is expected because volumes are flat and input costs have gone up. Prices of petcoke, and diesel have moved up. Lower realisations will impact, particularly on a sequential basis.

The management commentary will be key. They have cash in their books. How they plan to utilise those funds and how they see demand and pricing play out -- those will be key.

(Edited by : Thomas Abraham)