Shree Cement Limited has received a GST demand order from tax authorities, requiring the company to make a regulatory disclosure under SEBI listing obligations. The cement manufacturer disclosed receiving the order from the Commissioner, Central GST & Central Excise, Jodhpur on 16th April, 2026.

GST Demand Details

The tax authority has issued an order demanding significant financial obligations from the company. The demand pertains to alleged non-payment of service tax, with authorities seeking both the principal amount and additional charges.

Company's Response and Legal Strategy

Shree Cement has indicated its intention to contest the demand through appropriate legal channels. The company maintains a strong position regarding the merits of the case and has outlined its planned course of action.

Key aspects of the company's response include:

• The order does not have major financial impact on the company
• The company disagrees with the contentions imposing the demand
• Management believes it has a strong case on merits
• Appeal under Section 86 of the Finance Act, 1994 will be filed before the Tribunal
• The appeal must be submitted on or before 15th July, 2026 (within 3 months from receipt date)

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 read with Para A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. Company Secretary S.S. Khandelwal signed the regulatory filing, ensuring compliance with stock exchange notification requirements.

The company has submitted the disclosure to both the National Stock Exchange of India Limited and BSE Limited, maintaining transparency with stakeholders regarding this regulatory development. The formal communication includes detailed annexures providing comprehensive information about the tax demand and the company's planned response strategy.

Jefferies has maintained its Hold rating on Shree Cement while significantly reducing its target price from ₹30,000 to ₹27,530. The brokerage's revised outlook reflects mounting concerns over energy cost inflation driven by West Asia geopolitical tensions and their impact on the cement manufacturer's profitability.

Energy Price Surge Impact

The primary factor behind Jefferies' target price revision is the substantial energy cost inflation stemming from the West Asia conflict. The brokerage estimates that energy price surges will result in approximately ₹300 per tonne variable cost inflation over the period spanning 4QFY26 to 2QFY27.

Limited Pricing Pass-through Challenges

Jefferies highlights the company's limited ability to pass through the increased costs to customers through pricing adjustments. This constraint on pricing power is expected to compress margins significantly, as the cement manufacturer struggles to offset the substantial input cost inflation through higher selling prices.

EBITDA Projections Revised Downward

The brokerage has made substantial cuts to its EBITDA projections for Shree Cement, reducing estimates by 4-9% for the FY27-28 period. These revisions reflect the anticipated margin pressure from elevated energy costs and the company's limited pricing flexibility in the current market environment.

The maintained Hold rating suggests Jefferies views the stock as fairly valued at current levels, despite the near-term headwinds from energy cost pressures and margin compression challenges.