Expect robust earnings growth for cement sector in Q1, Shree Cement top pick: Edelweiss

Edelweiss is maintaining Shree Cement as the top pick in the largecap space as it expects the company to report an EBITDA of over Rs 1,500 per tonne, highest in a decade.

Sharing his views on Q1FY20 earnings season, Navin Sahadeo of Edelweiss said, “In cement, we are seeing the volumes at the industry level being flat to marginal negative but the kind of support that we are getting from prices as well as the cost is leading us or driving us to robust earnings growth. So it should be a favourite sector."

“From the top pick perspective, in the largecap space, we are maintaining Shree Cement as a top idea given by the fact that in this quarter, they will report an EBITDA of over Rs 1,500 per tonne which will be the highest in this decade. In the midcap space, we continue to like JK Cement. It is all set to probably deliver the highest ever EBITDA per tonne in the grey cement space,” he said.

“We have India Cement as a company under coverage from the south region where we have a hold recommendation. Earnings could be healthy but from a valuation perspective and other concerns, we are not recommending it as our top pick in this space,” Sahadeo added.