📢 5 STEPS TOWARDS WEALTH 🚀 The Indian Stock Market Way

📍 Delhi | 22nd March 2025 | Saturday / 🕕 5:59 PM - 9:01 PM (Entry from 5:30 PM onwards)

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SHREE CEMENTS: CMP: 21163: LONG TERM GR: 15 CY GROWTH: 21 H1_FY23 RESULT UPDATE: 16TH OC

Lesson 54/223 | Study Time: 5 Min

Course: Top Quality Companies

Company: ShreeCem founded in Ajmer and HQ in Kolkata is one of the biggest Cement makers in N-India. One of the best among the whole cement sector with good Margins and best R-O-E. The Company is with high growth supported by low debt.

Past: They were making revenue and Net profit of 300 Cr and 1.5 Cr during the year 2001. Many people from you all have invested around a decade back when sales have reached around 4000 Cr & Profit of 700 Cr. We saw high growth and invested expecting growth should continue. Today they manage revenue & Net Profit of 17000 Cr and 2500 Cr respectively. Price was 20 during the year 2000 while 2000 during 2010, and it has already rallied from 20 to 2000 during 2010. Revenue is today 30X. A CAGR growth of 15% in revenue. Hence, the investment if done 2 decades back would be 1000X and the whole investment would have returned via dividends as they have consistently given around 20% dividends. Annual dividends could be as good as 5x today. Many people from You have accumulated since a long time when this company was in Nifty-500 & today it has upgraded to Next-50. Congratulations. Patience is the Key to Success.

Current Status: H1_FY2023: We saw strong government spending in infra during the past few years and hence despite covid we saw strong sales growth. Strong demand has been seen during past few quarters. Q1 was with 21% sales growth and even this continued to H1 with the same momentum of 21% growth. We may see the 15-18% sales growth this full year. Inflation is the biggest problem for cement sector as their largest cost is power fuel along with freight cost. We saw the jump of 101% in Power & Fuel cost this H1 which dragged the margin from 16% to just 6.3% in Q1 and this challenge cointinued even in Q2 as the margin dropped further from 6.3% to 5.5%. Hence we saw the profits falling during Q1 by 56% and it continued even in H1 with the fall of 61%. This year could be challenging for profits as we may see the profit drop by 50%.

Action: Considering strong sales demand but -ve profit trend we should be prepared for the correction. The New buying again can be done during current fall in the whole range of 20000 to 13000 with the next year target of 29500. We can hold it for the next decade to create wealth and expect multiyear rally. Target for the next 4 Years should be 45000. Currently since Q1 itself, stock has entered into correction mode, hence those who were looking to add can start the SIP.

Strong 65% promoter Holding, 6% MF Holding and 13% FPI holding. Only 3% Indian retail investors Hold this wealth creator.

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Piyush Patel

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