Global brokerage Jefferies has reaffirmed its 'Hold' rating on Shree Cement, with a target price of ₹27,600 per share. Here's a full breakdown of what's driving that call — progress on the Shree Cement Meghalaya project, the freshly released Q1 FY27 numbers, and the roadmap into FY28.
Jefferies' latest note takes a measured view of Shree Cement, one of India's largest cement manufacturers — acknowledging the cost pressure the company is currently working through, while highlighting a sizeable expansion pipeline that, in the brokerage's view, positions the Bangur family-promoted group for durable growth ahead.
Much of that confidence rests on how Shree Cement is scaling up on two fronts simultaneously. At home, the Shree Cement Meghalaya plant — a greenfield integrated cement facility — remains on schedule for commissioning by Q4 FY28. Overseas, its UAE unit is being scaled up to double capacity to 7 million tonnes in FY27. Together, these two projects sit at the heart of Shree Cement's medium-term growth strategy, and a key reason the stock keeps drawing investor interest on Dalal Street.
Shree Cement Meghalaya Plant Progress and the UAE Capacity Ramp-Up
The Shree Cement Meghalaya project has become one of the most closely tracked pieces of Shree Cement's capacity roadmap. The company says all required regulatory clearances are now secured, and orders for major plant equipment have already been placed — clear signs the project has moved from planning into active execution. Located in a fast-developing part of Northeast India, the plant is well positioned to serve rising cement demand as infrastructure and housing activity in the region continue to build.
Alongside this, the plan to double UAE capacity to 7 million tonnes in FY27 extends Shree Cement's presence abroad and reduces how heavily it relies on the domestic market alone. Between the Shree Cement Meghalaya build and the UAE ramp-up, management remains on course toward its stated goal of 80 million tonnes in total capacity by 2029.
What's Pushing Costs Higher This Quarter
Even with the growth pipeline intact, Jefferies flagged the margin pressure that showed up this quarter. A shift away from petcoke toward costlier coal has driven input costs up. That's been compounded by disrupted gypsum supply from the Middle East, tied to ongoing geopolitical tensions in West Asia, adding further strain to costs.
The switch to lower-grade coal has also had a side effect: it weakened the clinker-to-cement conversion ratio, an important efficiency benchmark in cement manufacturing. On a more encouraging note, management expects both the fuel mix and trade mix to normalise starting Q2 FY27, opening a clearer path back to healthier margins as the year progresses.
Q1 FY27 Results: Revenue Grows, Profit Comes Under Pressure
Jefferies' note follows Shree Cement's newly released Q1 FY27 results, which echo a pattern playing out across the cement sector this quarter — strong revenue growth weighed down by rising costs further down the P&L.
Consolidated revenue rose 18 per cent year-on-year to ₹6,233.13 crore, up from ₹5,280.88 crore in the same quarter last year. Even as margins came under pressure, the company held its full-year domestic cement volume guidance steady at 40 million tonnes.
Profitability felt the strain more directly. Consolidated net profit dropped 17.48 per cent to ₹531.12 crore, down from ₹643.66 crore a year earlier, as higher fuel and raw material costs weighed on operations. Total consolidated expenses for the quarter rose 22.7 per cent to ₹5,703.75 crore.
Volumes and Premium Products Keep Climbing
Despite the dip in profit, the operational story stayed strong. Cement sales volume grew 17 per cent year-on-year to 10.23 million tonnes, while total volume including clinker rose 17.2 per cent to 10.49 million tonnes — double-digit growth reflecting continued strength in India's cement demand, driven by government infrastructure spending and steady housing activity.
The premiumisation push also made further headway, with premium products climbing to 23.3 per cent of total trade volume, up from 17.7 per cent a year earlier — a shift that supports pricing and helps protect margins over time. Managing Director Neeraj Akhoury said the quarter reflected healthy demand, strong volume growth and continued progress on premiumisation.
The Ready-Mix Concrete (RMC) business also delivered a strong quarter, with volumes jumping 156 per cent year-on-year to 2.36 lakh cubic metres. Eight new plants came online during the quarter, taking the total network to 33 plants across 17 cities in 11 states.
Sustainability Metrics Continue to Improve
Shree Cement posted further gains on the environmental front this quarter, an area of growing importance to ESG-focused investors. Green electricity now makes up 65.2 per cent of total consumption, up from 64 per cent a year ago, with green power capacity at 666.5 MW. CARE ESG Ratings responded by raising the company's ESG score to 73.8 from 70.8, maintaining its 'CareEdge-ESG 1' rating — a metric increasingly relevant to how the Shree Cement Meghalaya expansion is being evaluated by long-term investors.
Community and Sustainability Footprint of the Shree Cement Meghalaya Project
Beyond the financial results, the community engagement tied to the Shree Cement Meghalaya project has drawn steady coverage from regional media — a factor that matters increasingly to investors assessing the company's standing with local communities as the plant nears commissioning. The company has extended community healthcare support in the region, building on existing programmes in Rajasthan's Beawar belt, and has added eye-screening camps and ambulance services for residents near its project site. Reports indicate that Shree Cement has strengthened health services across the district, with further coverage supporting the scale of this rollout, and additional updates tracking the company's expanding presence in the state, a theme also picked up in other regional reporting.
On the environmental side, Shree Cement has scaled up solar-powered education and clean energy projects across the state, with coverage showing Shree Cement widening its community development work through solar installations in the region, backed by similar reporting confirming the scale of the rollout. A separate update notes Shree Cement adding further clean energy projects at local schools, with the Shree Cement Meghalaya ESG footprint strengthening alongside this work. Other reports have noted how Shree Cement has contributed to the state's development through this combination of solar-powered education and clean energy initiatives, alongside a broader clean energy digital learning programme that has reportedly reached more than 6,000 students statewide.
The Takeaway for Investors
Jefferies' 'Hold' rating and ₹27,600 target price reflect a company navigating a transitional quarter while its long-term growth story remains intact. The cost pressure seen this quarter — driven by the fuel-mix shift and West Asia-linked supply disruptions — is expected to ease from Q2 onward. The core growth drivers stay strong: double-digit volume growth, an accelerating premiumisation push, a fast-growing RMC segment, and a well-defined capacity expansion plan anchored by the Shree Cement Meghalaya greenfield plant and the UAE capacity doubling.
For investors tracking the Shree Cement share price, the overall message from both management and the brokerage community is one of cautious optimism — a quarter marked by cost turbulence, set against a multi-year growth story that continues to build on solid foundations, with the Shree Cement Meghalaya project standing out as one of its clearest near-term catalysts.
Frequently Asked Questions
What is Jefferies' current rating on Shree Cement?
Jefferies has maintained a 'Hold' rating on Shree Cement, with a target price of ₹27,600 per share.
When is the Shree Cement Meghalaya plant expected to be commissioned?
The Shree Cement Meghalaya plant — a greenfield integrated cement facility — is on track for commissioning by the fourth quarter of FY28, according to the company.
Why did Shree Cement's profit fall in Q1 FY27 despite higher revenue?
Consolidated revenue rose 18 per cent year-on-year, but net profit fell 17.48 per cent due to higher input costs — driven by a shift from petcoke to costlier coal and disrupted gypsum supply linked to tensions in West Asia.
What is Shree Cement's total capacity target by 2029?
Management has guided toward a total capacity of 80 million tonnes by 2029, supported by the Shree Cement Meghalaya greenfield build and the doubling of UAE capacity to 7 million tonnes in FY27.
How has Shree Cement's ESG score changed recently?
CARE ESG Ratings upgraded Shree Cement's ESG score to 73.8 from 70.8, reaffirming its 'CareEdge-ESG 1' rating, supported by rising green electricity usage and expanded green power capacity.
When are Shree Cement's cost pressures expected to ease?
Management has guided that both the fuel mix and trade mix should normalise from the second quarter of FY27 onward, which is expected to support a return to healthier margins.
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