Shree Cement , India's third-largest cement group by capacity, reported a robust financial performance for the first quarter, with a significant surge in profit despite sales volume falling short of market expectations.

Financial Highlights

The company's net profit for Q1 soared by 95% year-on-year to ₹619.00 crore, compared to ₹318.00 crore in the same quarter last year. This impressive growth was driven by improved pricing and operational efficiencies.

Revenue from operations saw a modest increase of 2% to ₹4,948.00 crore, up from ₹4,835.00 crore in the corresponding quarter. The operating profit (EBITDA) jumped by 34% to ₹1,229.00 crore, reflecting the company's focus on cost management and operational excellence.

Sales Volume Below Expectations

Despite the strong financial performance, Shree Cement reported a sales volume of 8.95 million tonnes for the quarter, which fell short of the estimated 9.60 million tonnes. The actual sales volume was approximately 6.8% lower than market expectations, indicating potential challenges in demand or market share.

Operational Performance

The company's EBITDA margin improved significantly, driven by a sustained focus on pricing, premiumization, and disciplined cost management. Shree Cement's sale of premium products improved to 17.7% of trade sale volume, up from 15.6% in the previous quarter.

UAE Operations

Shree Cement's UAE operations, through Union Cement Company (UCC), showed strong growth. The UAE business recorded revenue of AED 181.19 million, representing a 19% year-on-year increase. The operating profit (EBITDA) for the UAE operations surged by 397% to AED 44.86 million.

Sustainability Initiatives

Shree Cement continued its commitment to sustainability:

• Green electricity consumption stood at 65.65% of total electricity consumption in Q1.
• The company used 0.15 lakh tonnes of agro waste in its cement operations, saving 0.20 lakh tonnes of CO2.
• All manufacturing locations maintained Zero Liquid Discharge status.

Future Outlook

Neeraj Akhoury, Managing Director of Shree Cement Ltd., commented on the results: "We are pleased to report a strong start to the financial year, with robust performance in the first quarter reflecting the resilience of our business model and the dedication of our teams across the organisation."

The company is progressing with its capacity expansion projects in Rajasthan and Karnataka, which will increase its total cement production capacity to 68.8 MTPA upon completion. Shree Cement aims to reach a capacity of 80 MTPA by 2028.

While the lower-than-expected sales volume may raise some concerns, the company's strong financial performance and focus on operational efficiency suggest a positive outlook. The Indian cement industry is projected to grow by 6-7% in the current fiscal year, driven by government capital expenditure, rising rural housing demand, and accelerating industrial and infrastructure activity.

Investors and analysts will likely keep a close eye on how Shree Cement addresses the sales volume shortfall in the coming quarters while maintaining its strong profitability and sustainability initiatives.

Shree Cement , one of India's leading cement manufacturers, has reported a strong financial performance for the first quarter of the fiscal year. The company's results showcase significant growth in revenue and profitability, indicating a robust start to the year.

Financial Highlights

• Revenue: Shree Cement's revenue from operations increased to ₹4,947.98 crore in Q1, up from ₹4,834.69 crore in the same quarter last year, marking a 2.3% year-on-year growth.
• Net Profit: The company's net profit nearly doubled to ₹618.51 crore, compared to ₹317.71 crore in the corresponding quarter of the previous year, representing an impressive 94.7% increase.
• EBITDA: Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a substantial rise to ₹1,430.12 crore from ₹1,050.94 crore year-over-year, reflecting a growth of 36.1%.
• EBITDA Margin: The EBITDA margin expanded significantly to 28.9% from 21.7% in the same period last year.

Operational Performance

Shree Cement's operational efficiency improvements are evident in its financial metrics:

The company has effectively managed its expenses despite inflationary pressures. The decrease in power and fuel expenses indicates improved energy efficiency or favorable input costs.

Balance Sheet Strength

Shree Cement maintains a strong financial position:

• Net Worth: The company's net worth stood at ₹21,839.25 crore, up from ₹20,699.64 crore in the previous year, indicating steady growth in shareholder value.
• Debt Profile: The debt-to-equity ratio remained stable at 0.04, showcasing the company's conservative approach to leverage.

Outlook

The cement industry outlook appears positive, as reflected in Shree Cement's strong Q1 performance. Factors such as infrastructure development, urban housing demand, and government initiatives are likely contributing to the sector's growth. However, investors should note that future performance may be influenced by factors such as raw material costs, energy prices, and overall economic conditions.

Shree Cement's ability to significantly improve its profit margins while growing revenue demonstrates its operational excellence and market strength. As the company continues to focus on efficiency and strategic growth, it remains well-positioned in the competitive cement industry landscape.

Note: All financial figures are based on standalone results for the quarter ended June 30.