Shree Cement Analyzed
Shree Cement, or SRCM, has been getting a lot of attention lately, especially from buyers of building materials. Over the last two weeks, people have been buying more materials directly, and prices are expected to go up. This good news was confirmed by a financial analyst firm called PL Capital, who gave SRCM a “Buy” rating.
Key Points
- SRCM is gaining traction in sales to regular customers.
- Prices are expected to rise over the next few months.
- Analysts recommend buying Shree Cement stock.
- Company focused on cutting costs to stay competitive.
- New building projects are boosting demand for cement.
- Expansion plans will increase SRCM’s market share.
PL Capital thinks SRCM is good at finding ways to save money, which helps them sell more cement at a good price. They’ve been doing this for a long time, and other cement companies are starting to do it too. However, PL Capital says SRCM needs to find new ways to grow, like selling more cement, rather than just saving money.
Recently, the analysts talked to people at SRCM to understand their plans. They also pointed out a problem: too much cement is being built in the north, and this could hurt SRCM’s sales there. But SRCM says it will sell more cement in other parts of India and change its strategy to focus on quality over quantity.
The analysts also said that SRCM is not selling as much cement as it wants to, which has caused them to lose some customers. However, SRCM says it will start selling more cement again to catch up. SRCM currently sells cement in about 9% of India’s market, and this number is expected to grow to 13% in the future as they build new factories.
The government is spending a lot of money on building roads and other infrastructure, which is helping to increase demand for cement. But the government is mainly spending this money on defense and special projects, so there isn’t a lot of building going on for regular homes and businesses. SRCM expects overall demand to grow by 7-8% in the coming years.
Saving money is a big priority for SRCM. Getting cement from one factory to the market is cheaper than using trucks, but adding extra steps to handle the cement has made the cost closer. Currently, 11% of SRCM’s shipments use trains, and they plan to increase this to 20% in the future.
SRCM is building new factories and expanding its existing ones. They plan to have 80 million tons of building capacity by 2029. They will mainly build in the South and East of India. SRCM has a lot of limestone, which will last for 50 years, and they don’t expect to have to buy it for a long time. They’re also doing well in the United Arab Emirates, where they’re renovating one factory and adding more capacity quickly.
The UAE market is stable and has good prices, which is helping SRCM make more money.
“The company remains focused on efficiencies and Ebitda per tonne delivery.”
