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Centrum Broking Report
Shree Cement Ltd. reported lower than expected Ebitda of Rs 5.23 billion, down 36% QoQ (our estimate: Rs 6 billion). The sequential decrease in Ebitda was due to lower volume and realisation QoQ and higher raw material cost on account of rise in inventory levels.
Though, cost of production remained flat QoQ offset by lower power and fuel cost. Ebitda/tonne stood lower by Rs 364/tonne (down 33% QoQ) to seven year low of Rs 737/tonne.
Power and fuel cost/tonne fell 11% QoQ on account of decrease in coal/petcoke prices and expect larger effect of prices decline will be visible in Q3 FY23.
The overall net working capital days increased from 22 days to 64 days largely due to higher inventory days from 46 days as on March 2022 end to 57 days as on Sept 2022 end.
Shree Cement intends to increase overall cement capacity from 46 million tonnes per annum to 80 mtpa by FY30. We expect margins to bottom out in Q2 FY23.
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