Saurashtra Cement Limited (SCL) has reported a significant improvement in its financial performance for the second quarter of fiscal year 2026, with reduced losses and increased revenue compared to the same period last year.

Financial Highlights

The company's unaudited financial results for Q2 FY26 reveal the following key metrics:

*EBITDA calculated as Net Loss + Finance Costs + Depreciation and Amortisation Expenses

Revenue Growth

Saurashtra Cement's revenue from operations saw a substantial increase of 30.16% year-over-year, rising from ₹29,627.90 lakhs in Q2 FY25 to ₹38,563.87 lakhs in Q2 FY26. This growth may be attributed to improved market conditions and potentially higher sales volumes or better pricing strategies.

Narrowed Losses

The company has managed to significantly reduce its net loss by 64.97%, from ₹3,149.51 lakhs in Q2 FY25 to ₹1,103.24 lakhs in Q2 FY26. This improvement indicates the effectiveness of cost management measures and operational efficiencies implemented by the company.

Segment Performance

SCL operates in two reportable segments:

1. Cement & Clinker
2. Paints

The cement and clinker segment, which forms the core of SCL's business, reported revenue of ₹37,092 lakhs in Q2 FY26, compared to ₹28,082 lakhs in Q2 FY25, marking a 32.08% increase.

The paints segment showed a decrease, with revenue falling from ₹1,546 lakhs in Q2 FY25 to ₹1,472 lakhs in Q2 FY26, a 4.79% decline.

Operational Efficiency

The company's EBITDA loss narrowed significantly from ₹1,669.53 lakhs in Q2 FY25 to ₹502.47 lakhs in Q2 FY26, representing a 69.90% improvement. This suggests that SCL has been successful in controlling its operational costs despite the challenging market environment.

Balance Sheet Position

As of September 30, 2025, Saurashtra Cement reported:

• Total Assets: ₹1,57,731 lakhs
• Total Equity: ₹95,289 lakhs
• Total Liabilities: ₹62,442 lakhs

The company maintains a healthy balance sheet with a debt-to-equity ratio of approximately 0.66, indicating a conservative financial structure.

Outlook

While Saurashtra Cement continues to face challenges, as evidenced by the ongoing losses, the significant improvement in financial performance suggests that the company's turnaround strategies may be gaining traction. The substantial revenue growth and narrowing losses point to potentially improving market conditions and effective management initiatives.

Investors and market observers will likely keep a close watch on SCL's performance in the coming quarters to see if this positive trend continues and translates into profitability.

Note: All figures are based on standalone financial results as reported by the company.

Saurashtra Cement Limited , a prominent player in the Indian cement industry, has received a significant tax demand order from the Office of the Commissioner of Central Excise & CGST, Bhavnagar. The order, totaling Rs 16.56 crores, relates to alleged ineligible availment and utilization of Input Tax Credit (ITC) under GST provisions for the financial years 2018-19 to 2023-24.

Breakdown of the Demand Order

The demand order also includes applicable interest, which is not specified in the available information.

Company's Response

Saurashtra Cement has stated that it considers the demand as not maintainable. The company is currently evaluating its options, which include filing an appeal against the order. Despite the substantial amount involved, Saurashtra Cement does not anticipate any material impact on its financials, operations, or other activities.

Legal Basis of the Demand

The tax authorities have invoked Sections 74(1) and 122(2)(b) of the Central Goods and Services Tax (CGST) Act, 2017, along with corresponding provisions of the Gujarat Goods and Services Tax (GGST) Act, 2017, and the Integrated Goods and Services Tax (IGST) Act, 2017.

Implications and Next Steps

While the company maintains its stance on the invalidity of the demand, the situation underscores the complex regulatory environment in which Indian businesses operate, particularly concerning tax matters. The outcome of this case may have implications for other companies in the cement sector and beyond, especially regarding the interpretation and application of Input Tax Credit rules under the GST regime.

Investors and stakeholders of Saurashtra Cement will likely be watching closely as the company navigates this challenge. The company's decision to explore legal options suggests a confident stance in its tax compliance practices.

As the situation develops, it will be crucial to monitor any updates from Saurashtra Cement regarding its appeal process and any potential impact on its financial statements in the coming quarters.