Shri Keshav Cements & Infra Ltd Valuation Shifts Signal Renewed Price Attractiveness

Valuation Metrics: A Closer Look

At present, Shri Keshav Cements & Infra Ltd trades at a P/E ratio of an extraordinary 30,358.36, a figure that is exceptionally high by any standard. This astronomical P/E is primarily a reflection of the company’s near-zero earnings, with the latest return on equity (ROE) standing at a mere 0.01%. Such a high P/E ratio typically signals overvaluation; however, in this case, it is more indicative of the company’s current earnings challenges rather than market exuberance.

In contrast, the price-to-book value ratio is a more grounded 3.03, which is considered attractive relative to the sector average. The cement industry peers such as Sh. Digvijay Cement and Saurashtra Cement trade at P/E ratios of 28.4 and 28.77 respectively, with P/BV ratios generally higher than Shri Keshav’s, reflecting their relatively stable earnings profiles. Notably, NCL Industries, a peer rated as very attractive, trades at a P/E of 14.53 and an EV/EBITDA of 7.64, underscoring the valuation gap within the sector.

Enterprise Value Multiples and Profitability

Shri Keshav’s enterprise value to EBITDA (EV/EBITDA) ratio stands at 16.38, which is moderately elevated compared to some peers but still within a reasonable range given the company’s growth prospects. The EV to EBIT ratio is 26.94, signalling that earnings before interest and taxes remain under pressure. The company’s return on capital employed (ROCE) is 5.97%, which is modest and suggests limited capital efficiency at this stage.

These valuation multiples, combined with the company’s low profitability metrics, have contributed to a downgrade in its mojo grade from Hold to Sell as of 31 Dec 2025. The mojo score currently stands at 40.0, reflecting concerns about earnings quality and market sentiment.

Price Performance and Market Context

Shri Keshav’s stock price has experienced significant volatility over the past year. The current price is ₹173.35, down 1.90% on the day and below its 52-week high of ₹286.75. The stock has underperformed the Sensex across multiple time frames, with a 1-month return of -19.37% compared to Sensex’s -2.36%, and a year-to-date return of -14.33% versus Sensex’s -1.74%. Over the longer term, however, the stock has delivered impressive gains, with a 5-year return of 352.61% far outpacing the Sensex’s 66.63%.

Comparative Valuation: Peer Analysis

When benchmarked against its cement industry peers, Shri Keshav’s valuation presents a mixed picture. While its P/E ratio is an outlier due to earnings challenges, its P/BV ratio of 3.03 is more attractive than many competitors. For instance, Sh. Digvijay Cement, rated as expensive, trades at a P/E of 28.4 and an EV/EBITDA of 17.0, slightly higher than Shri Keshav’s 16.38 EV/EBITDA. Meanwhile, NCL Industries, rated very attractive, offers a much lower P/E of 14.53 and EV/EBITDA of 7.64, highlighting better earnings stability and valuation.

Several peers such as Shiva Cement, Andhra Cements, and Anjani Portland are classified as risky due to loss-making operations, which contrasts with Shri Keshav’s position as an attractive valuation candidate despite its earnings struggles. This relative positioning suggests that while Shri Keshav faces near-term profitability issues, its asset base and market positioning may offer upside potential if earnings recover.

Investment Outlook and Quality Grades

The downgrade in mojo grade to Sell reflects caution among analysts and investors, driven by the company’s weak ROE and modest ROCE. The market cap grade of 4 indicates a smaller capitalisation relative to larger peers, which can contribute to higher volatility and liquidity concerns. However, the shift in valuation grade from fair to attractive signals that the stock price has adjusted to reflect current earnings realities, potentially offering a value entry point for risk-tolerant investors.

Investors should weigh the company’s long-term growth prospects, including its infrastructure and cement product segments, against the backdrop of subdued profitability and sector cyclicality. The stock’s historical outperformance over five and ten years suggests resilience, but recent underperformance and valuation anomalies warrant a cautious approach.

Conclusion: Valuation Attractiveness Amid Earnings Challenges

Shri Keshav Cements & Infra Ltd’s valuation profile has shifted to an attractive rating primarily due to a significant correction in its share price and a relatively moderate price-to-book value ratio. Despite a sky-high P/E ratio driven by negligible earnings, the company’s EV/EBITDA multiple remains within a reasonable range compared to peers. The downgrade to a Sell mojo grade reflects ongoing concerns about profitability and capital efficiency, but the valuation adjustment may offer a window for investors seeking exposure to the cement sector at a discounted price.

Given the company’s mixed financial signals and sector volatility, investors should approach Shri Keshav with a balanced view, considering both its long-term growth potential and near-term risks. Monitoring earnings recovery and operational improvements will be key to reassessing the stock’s investment merit in the coming quarters.

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