Shree Cement: Q2 operationally sound despite rising costs

Per-tonne profitability better than peers

Shree Cement’s performance for the seasonally soft September quarter, which bears the impact of monsoon, was better than expectations at the operating level, even as costs were elevated. Although net profit missed estimates, it was due to higher tax expenses. The profit miss led to the stock correcting 2 per cent to Rs 18,629 levels on Wednesday, but any correction offers an opportunity for long-term investors to buy this most-profitable cement player.

The company’s sales volumes at 4.88 million tonnes (mt) grew seven per cent year-on-year (y-o-y) but were down 0.7 per cent sequentially —largely on expected lines given the monsoon