Shree Cement (SRCM IN) – Q1FY27 Result Update – Strong volumes, but higher fuel costs impacted Q1 – ACCUMULATE
Published on 01 Aug 2026
SRCM reported weak standalone operating performance in Q1FY27 despite robust 17% YoY volume growth, as higher production costs weighed on profitability. While blended NSR improved 2.3% QoQ aided by price hikes and higher premium product share, EBITDA/t declined to INR1,024 (PLe: INR1,115/t) due to elevated P&F and freight costs. The increase in costs was primarily due to disruption in contracted pet coke and gypsum supplies following the Middle East conflict, forcing the company to use higher-cost low-quality domestic coal, which effectively lowered clinker conversion, increased OPC sales and impacted realisations. Management expects costs to moderate from Q2FY27 as contracted pet coke supplies normalise and has maintained its FY27 volume guidance of ~40mt (~10%YoY growth). At CMP, the stock is trading at 15.1x FY28E EV/EBITDA. Maintain ‘Accumulate’ with a revised TP of INR29,085 (earlier INR28,834), valuing the stock at same 17x Mar’28E EV/EBITDA.
