⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SHREECEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | SHREECEM | Market Cap | 86,281 Cr. | Current Price | 23,900 ₹ | High / Low | 32,508 ₹ |
| Stock P/E | 49.9 | Book Value | 6,078 ₹ | Dividend Yield | 0.46 % | ROCE | 7.17 % |
| ROE | 5.69 % | Face Value | 10.0 ₹ | DMA 50 | 25,788 ₹ | DMA 200 | 27,420 ₹ |
| Chg in FII Hold | -0.27 % | Chg in DII Hold | 0.19 % | PAT Qtr | 279 Cr. | PAT Prev Qtr | 277 Cr. |
| RSI | 36.8 | MACD | -859 | Volume | 17,637 | Avg Vol 1Wk | 37,092 |
| Low price | 22,855 ₹ | High price | 32,508 ₹ | PEG Ratio | -2.42 | Debt to equity | 0.09 |
| 52w Index | 10.8 % | Qtr Profit Var | 21.4 % | EPS | 480 ₹ | Industry PE | 28.2 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT remained stable at ₹279 Cr. vs ₹277 Cr. (flat growth).
- Margins: ROE at 5.69% and ROCE at 7.17% → weak efficiency.
- Debt: Debt-to-equity ratio of 0.09 → very low leverage, strong balance sheet.
- Cash Flow: Stable but limited by modest profitability.
- Return Metrics: EPS at ₹480, strong absolute earnings but low return ratios.
💹 Valuation Indicators
- P/E Ratio: 49.9 vs Industry PE of 28.2 → overvalued.
- P/B Ratio: Price ₹23,900 / Book Value ₹6,078 ≈ 3.93.
- PEG Ratio: -2.42 → negative, reflecting weak growth outlook.
- Intrinsic Value: Current valuation stretched, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Operates in cement manufacturing, a critical infrastructure sector.
- Competitive advantage lies in brand strength and scale of operations.
- Low debt enhances financial resilience.
- Challenges include weak profitability metrics and cyclical demand pressures.
📈 Entry Zone Recommendation
- Technicals: RSI at 36.8 (oversold), MACD negative, price below 50DMA (25,788) and 200DMA (27,420).
- Entry Zone: Attractive accumulation near ₹22,800–23,200 for long-term investors.
- Holding Guidance: Suitable for patient investors; long-term holding depends on margin improvement and demand recovery.
✅ Positive
- Debt-to-equity ratio very low (0.09).
- EPS strong at ₹480.
- DII holdings increased (+0.19%).
⚠️ Limitation
- Weak ROE (5.69%) and ROCE (7.17%).
- High P/E (49.9) compared to industry average (28.2).
- Dividend yield low at 0.46%.
📉 Company Negative News
- FII holdings decreased (-0.27%).
- Stock corrected from ₹32,508 to ₹23,900.
- Technical indicators (MACD negative, RSI oversold) show bearish sentiment.
📈 Company Positive News
- Quarterly PAT stable at ₹279 Cr.
- DII confidence increased (+0.19%).
- Oversold RSI may attract value investors.
🌐 Industry
- Cement industry is cyclical but critical for infrastructure and housing growth.
- Industry PE at 28.2 indicates sector trades at lower valuations compared to SHREECEM.
- Government focus on infrastructure spending supports long-term demand.
🔎 Conclusion
- SHREECEM shows strong scale and low debt but suffers from weak profitability and high valuation.
- Valuations are stretched, limiting near-term upside.
- Best considered for long-term investors with entry near ₹22,800–23,200; holding depends on margin recovery and demand growth.