Shri Keshav Cements & Infra Ltd Upgraded to Hold on Technical and Financial Improvements

Quality Assessment: Mixed Fundamentals Amidst High Debt

Shri Keshav operates within the Cement & Cement Products sector, a capital-intensive industry where operational efficiency and financial strength are critical. The company’s quality rating remains cautious due to its high leverage and modest profitability. With an average debt-to-equity ratio of 3.97 times, Shri Keshav is classified as a high debt company, which raises concerns about financial risk and interest burden.

Profitability metrics further temper enthusiasm. The average Return on Capital Employed (ROCE) stands at 8.38%, indicating relatively low returns generated per unit of capital invested. While the latest quarter (Q2 FY25-26) showed a positive PAT of ₹3.78 crores and net sales growth of 44.65% to ₹35.41 crores, the company’s profits have declined sharply by 99.8% over the past year. Operating profit growth over the last five years has been a moderate 16.39% annually, suggesting limited long-term expansion.

These factors contribute to a cautious quality grade, reflecting weak long-term fundamentals despite recent quarterly improvements.

Valuation: Attractive Relative to Peers

Valuation is a key driver behind the upgrade to Hold. Shri Keshav’s current price of ₹188.45 is trading at a discount compared to its peers’ historical averages. The company’s ROCE of 6% combined with an Enterprise Value to Capital Employed ratio of 1.7 signals an attractive valuation level for investors seeking value opportunities in the cement sector.

Despite underperforming the broader market benchmarks—returning -4.90% over the last year versus the BSE500’s 5.24% gain—the stock’s five-year return of 471.06% significantly outpaces the Sensex’s 77.88% over the same period. This long-term outperformance suggests underlying value that may not yet be fully recognised by the market.

Financial Trend: Recent Positive Momentum Contrasts with Longer-Term Challenges

The company’s recent financial performance has shown encouraging signs. The second quarter of FY25-26 delivered a 44.65% increase in net sales to ₹35.41 crores and a PAT of ₹3.78 crores, marking a positive turnaround compared to previous quarters. This short-term momentum supports the upgrade to Hold, signalling that operational improvements may be taking hold.

However, the broader financial trend remains mixed. Over the past year, profits have plummeted by nearly 100%, and the stock’s one-year return of -4.90% lags the Sensex’s 7.62% gain. The company’s operating profit growth rate of 16.39% over five years is moderate but insufficient to offset concerns about its high debt and weak long-term fundamentals.

Technicals: Shift to Mildly Bullish Signals Spurs Upgrade

The most significant catalyst for the rating change is the improvement in technical indicators. The technical trend has shifted from sideways to mildly bullish, reflecting growing investor confidence and positive price momentum. Key technical signals include:

• MACD: Weekly remains mildly bearish, but monthly readings have turned bullish, suggesting longer-term upward momentum.


• Moving Averages: Daily indicators are mildly bullish, supporting near-term price strength.


• Bollinger Bands: Weekly signals mild bearishness, but monthly bands are bullish, indicating potential for price expansion.


• RSI and Dow Theory: Both weekly and monthly readings show no clear signals, implying a neutral momentum backdrop.


• KST: Weekly mildly bearish and monthly bearish, indicating some caution remains in momentum oscillators.

On 30 Dec 2025, the stock closed at ₹188.45, up 4.69% from the previous close of ₹180.00, with intraday highs reaching ₹188.65. The 52-week range remains wide, from ₹124.30 lows to ₹286.75 highs, reflecting volatility but also potential upside.

Comparative Performance: Outperforming Over Long Term but Lagging Recently

Shri Keshav’s stock has delivered impressive returns over the long term, with a 10-year return of 166.17% and a remarkable 471.06% over five years, far exceeding the Sensex’s respective 224.76% and 77.88%. However, the recent one-year and year-to-date returns have been negative, at -4.90% and -5.30%, respectively, while the Sensex gained 7.62% and 8.39% over the same periods.

This divergence highlights the stock’s cyclical nature and the impact of recent operational and market challenges. The upgrade to Hold reflects a balanced view that while near-term risks persist, the stock’s valuation and technical improvements warrant a more neutral stance than outright Sell.

Outlook and Investment Considerations

Shri Keshav Cements & Infra Ltd’s upgrade to Hold by MarketsMOJO reflects a cautious optimism grounded in improved technical trends and attractive valuation metrics. Investors should weigh the company’s recent positive quarterly results and mild bullish technical signals against its high debt levels and weak long-term profitability.

The stock’s current Mojo Score of 50.0 and Mojo Grade of Hold, upgraded from Sell, indicate a neutral stance that favours monitoring further developments before committing to a stronger position. The company’s market cap grade of 4 suggests it is a mid-sized player within the cement sector, with potential for growth if operational efficiencies and debt management improve.

Given the sector’s cyclical nature and Shri Keshav’s financial profile, investors may consider this stock as a value play with moderate risk, suitable for those with a medium to long-term horizon and tolerance for volatility.

Continued monitoring of quarterly earnings, debt reduction efforts, and technical momentum will be critical to reassessing the stock’s outlook in the coming months.

Summary of Ratings and Scores

As of 29 Dec 2025, the key ratings for Shri Keshav Cements & Infra Ltd are:

• Mojo Score: 50.0 (Hold)


• Previous Grade: Sell


• Market Cap Grade: 4


• Technical Trend: Shifted from sideways to mildly bullish


• Financial Trend: Positive quarterly growth but weak annual profit trend


• Valuation: Attractive relative to peers with EV/Capital Employed of 1.7


• Quality: High debt and low ROCE constrain rating

These combined factors underpin the upgrade to Hold, signalling a more balanced risk-reward profile for investors.

Conclusion

Shri Keshav Cements & Infra Ltd’s recent upgrade from Sell to Hold is primarily driven by improved technical indicators and a more attractive valuation compared to sector peers. While the company’s financial fundamentals remain challenged by high leverage and subdued profitability, recent quarterly results and a shift to mildly bullish technical trends provide a foundation for cautious optimism.

Investors should remain vigilant of the company’s debt levels and monitor upcoming earnings releases to validate the sustainability of recent improvements. For now, the Hold rating reflects a prudent stance that balances potential upside with existing risks in the cement sector environment.

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