Accumulate Shree Cement - Emkay

Shree Cement
Reco: ACCUMULATE
CMP: Rs 2,227
Target Price: Rs 2,500

Solid Performance, upgrade earnings & target

- SRCM delivered solid 3QFY12 performance with adjusted EBIDTA growing 119% yoy to Rs3.44 bn significantly ahead of our & street estimate

- EBIDTA/t at Rs1159 jump 2X yoy driven by higher realization (+33% yoy to Rs3797/t,vs est of Rs3561/t), better product mix (cement volumes ~98% of total vs 88% in 3QFY11) & cost control (up just 1.5% qoq to Rs2638/t)

- Energy Cost advantage & higher cement prices to improve SRCM's profitability. This has led to upgrades in our EBITDA estimates for FY12/13E by 8.9%/4.5%

- SRCM remains our top midcap pick. Raise TP to Rs2500 Valuation at 5.1X EV/E & EV/t of USD102 for FY13 remain attractive given improving earnings outlook - ACCUMULATE.

Source : Equity Bulls

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