SHREECEM - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.7

🏗️ Shree Cement Ltd shows strong brand positioning and low debt, but high valuation and weak return metrics suggest caution for long-term investors.

📈 Positive

• Low Leverage: Debt-to-equity ratio of 0.09 reflects strong financial discipline.
• High EPS: ₹466 indicates robust earnings capacity.
• Strong Institutional Interest: FII holdings increased by 0.27%.
• Quarterly Profit Surge: Qtr Profit Var of 198% shows significant earnings rebound.
• Brand Strength: One of India’s leading cement producers with a wide distribution network.

⚠️ Limitation

• High Valuation: P/E of 60.8 is well above the industry average of 38.9.
• Weak Return Metrics: ROCE at 7.17% and ROE at 5.69% suggest suboptimal capital efficiency.
• Negative PEG Ratio: -2.95 implies valuation may not be supported by growth.
• Technical Weakness: RSI at 36.8 and MACD at -285 indicate bearish momentum.

📉 Company Negative News

• Q2FY26 net profit missed analyst estimates by 14.6% despite tripling YoY

  Trendlyne

  .

• Trading below both 50 DMA and 200 DMA, reflecting technical weakness.
• Decline in DII holdings (-0.25%) signals cautious domestic sentiment.

📈 Company Positive News

• Three-year return of 54.7% driven by 6.5% quarterly revenue growth and 11.7% profit margin

  stockpricearchive.com

  .

• Strong YoY profit growth and operational efficiency improvements in recent quarters

  Trendlyne

  .

• Analysts project long-term growth from infrastructure demand and rural housing expansion

  dailybulls.in

  .

🏭 Industry

• Cement sector benefits from government infrastructure push and housing demand.
• Industry P/E of 38.9 reflects moderate valuation norms.
• Peers include Ambuja Cements, ACC, Dalmia Bharat, and UltraTech Cement.

🧾 Conclusion

• Entry Zone: ₹26,500–₹27,500 could be a favorable accumulation range based on RSI and support levels.
• Long-Term View: Hold for 3–5 years; monitor margin expansion and valuation compression.
• Valuation Watch: Consider phased entry or wait for earnings catch-up to justify current price.

Sources

stockpricearchive.com

+2