SHREECEM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.2

📊 Core Financial Analysis

Profitability & Returns

EPS: ₹311 — strong absolute earnings, but not enough to justify the lofty price.

ROE: 5.29% & ROCE: 6.71% — below industry norms, indicating inefficient capital use.

PAT Qtr: ₹574 Cr vs ₹193 Cr — sequential growth, but YoY decline of 14.9% suggests margin pressure or volume weakness.

Debt & Leverage

Debt-to-Equity: 0.05 — extremely low leverage, a major strength in a cyclical industry.

Dividend Yield: 0.36% — modest, but consistent with reinvestment strategy.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 98.2 Extremely overvalued vs industry PE of 51.1

P/B Ratio ~5.09 High, but typical for premium cement brands

PEG Ratio -4.55 Negative PEG reflects earnings contraction, not growth

Intrinsic Value ~₹24,000–₹26,000 Current price is well above fair value, suggesting overvaluation

🏢 Business Model & Competitive Edge

Shree Cement is one of India’s most efficient cement producers, known for

Low operating costs

Strong brand presence in North and East India

Green energy initiatives and automation

Competitive advantage lies in cost leadership and scale, but recent margin compression and high valuation dilute its edge.

Cement is a cyclical sector, tied to infrastructure and real estate demand.

📉 Technical & Sentiment Indicators

RSI: 43.7 — slightly oversold, but not a strong reversal signal.

MACD: 178 — bullish momentum, but price action is range-bound.

Volume below average — low conviction among traders.

DMA 50 & 200 near current price — consolidation zone.

FII/DII holding changes are minor — neutral institutional sentiment.

🧠 Investment Guidance

🔍 Entry Zone (If Undervalued)

Ideal Buy Range: ₹25,000–₹27,000

Closer to intrinsic value and historical support.

Avoid entry at current levels due to valuation risk.

📈 Long-Term Holding View

Hold only if already invested, but avoid fresh entry

Valuation is stretched.

Returns on capital are weakening.

Wait for earnings rebound or price correction before considering accumulation.

Would you like a comparative breakdown of Shree Cement vs peers like UltraTech or Dalmia Bharat to assess relative value and growth potential?

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