In choppy trade on Friday, shares of Shree Cement Ltd fell 0.24 percent at Rs 19,999.9 on BSE in late noon trade, after a gap-up opening in the morning.

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Shree Cement's stock was unable to hold gains despite brokerage firm Jefferies upgrading its rating to 'hold' from 'underperform' on Thursday, with a target price of Rs 20,000 per share.

According to Jeffries, the company's stock appears to factor in expected FY23 industry-led weakness and the company has a strong focus on green energy, alternate fuels, and logistic savings.

The brokerage house also said that the company eyes a respite from cost inflation from H2FY23. It reiterates an 80 metric tonne per annum capacity by 2030 for the company.

Also read:

Shree Cement’s profit dips 16% as margin remains under pressure due to high input costs

Growth plan

Last year Shree Cement announced that it will set up an integrated cement plant in Rajasthan, a grinding unit in West Bengal, and a number of solar power plants at various locations. The company’s capex announcement is in line with its intent to reach an 80 million tonnes per annum (mtpa) capacity by 2030.

HM Bangur, MD, Shree Cement told CNBC-TV18 that the company will spend between Rs 4,500 crore and Rs 5,000 crore to complete the three projects: Rs 500 crore for the power plant, Rs 750 crore for the grinding unit in West Bengal, and the remaining amounts for the integrated unit in Nawalgarh, Rajasthan.

Also read: Shree Cement expects 9% growth in cement demand for FY22

He expects the demand to go up by 15-20 percent this year for the industry. “This year’s COVID-19 situation is far better compared to last year. Overall, the demand scenario will be about 7 percent compounded annual growth rate (CAGR) on a sustainable level is the assumption that we are working,” he added.

Shree Cement's key figures

In May this year, the cement manufacturer announced quarterly for the time period of January to March 2022. The company however reported a 5.6 percent higher profit at Rs 645 crore but, it was 16 percent lower than the Rs 768 crore profit that the company registered in the fourth quarter of last year.

Shree Cement reported revenue growth of 3.6 percent at Rs 4,098 crore for the quarter under review against Rs 3,958 in the corresponding quarter of the previous fiscal.

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First Published:Jul 8, 2022 3:29 PM IST