Shree Cement Limited , one of India's leading cement manufacturers, has reported a strong performance for the second quarter, with significant growth in EBITDA and improved realizations. The company's focus on premium products and value-over-volume strategy has yielded positive results, while its UAE operations have shown remarkable improvement.

Key Highlights

• Total cement sales volume increased by 6.8% year-on-year to 7.9 million tons
• EBITDA grew by 46% to INR 851 crores from INR 582 crores in the same quarter last year
• Realization per ton improved to INR 4,840 from INR 4,451, driven by increased share of premium products
• UAE operations delivered best-ever quarterly performance with 34% sales growth and 158% EBITDA increase

Financial Performance

Shree Cement's focus on premium products and improved pricing strategies has resulted in a significant improvement in its financial performance. The company's EBITDA per ton, adjusted for a one-time impact, increased by 43% from INR 772 to INR 1,105.

Premium Product Focus

The company's strategy to increase its share of premium products has shown positive results:

• Premium products' share increased from 15% to 21% of total sales
• This shift has contributed to the improved realization per ton

UAE Operations Excel

Shree Cement's UAE operations have delivered an exceptional performance:

• Sales volume increased by 34% to 13.1 lakh tons
• EBITDA surged by 158% to AED 52.53 million
• Sales revenue grew by 50% year-on-year

Capacity Expansion and Sustainability Initiatives

Shree Cement continues to focus on capacity expansion and sustainability:

• Commissioned a 3.65 million ton clinkerisation unit at Jaitaran, Rajasthan
• A 3 million ton cement mill at the same location is expected to be commissioned shortly
• Expanded RMC portfolio to 24 operational plants
• Achieved 63% green electricity share in total consumption
• Commissioned a 20-megawatt solar power plant in Chitrakoot, UP

Management Commentary

Neeraj Akhoury, Managing Director of Shree Cement, stated, "We have maintained our value-over-volume strategy and fully passed on the GST rate reduction benefits to our customers. Our focus on premium products and improved pricing strategies has yielded positive results, as reflected in our financial performance."

Outlook

The company remains optimistic about the cement demand outlook, citing factors such as:

• Above-normal monsoons supporting economic growth
• Steady employment conditions and benign inflation
• Recent rationalization of GST rates expected to stimulate demand
• Accelerated infrastructure development and growth in the housing sector

While the company maintains a cautious stance on short-term demand projections, it expects the GST rate reduction to boost cement demand in the long term.

Shree Cement's strong performance in Q2, coupled with its strategic focus on premium products and sustainability initiatives, positions the company well for future growth in the Indian cement market.

Shree Cement , one of India's leading cement manufacturers, has announced a strategic revision to its capacity expansion plans along with its Q2 financial results, showcasing the company's adaptability to market conditions and its continued financial strength.

Revised Expansion Strategy

Shree Cement has pushed back its ambitious target of achieving 80 million tonnes capacity to FY29, adapting to current market dynamics. The company now aims for a more measured growth:

• Projected cement sales of 37-38 million tonnes
• Targeted capacity of 72-75 million tonnes by FY27
• Revised timeline for reaching 80 million tonnes capacity by FY29

This adjusted timeline reflects a pragmatic approach to growth in response to market conditions. Additionally, the company plans to establish 40 Ready Mix Concrete (RMC) plants by FY28, diversifying its product offerings.

Financial Highlights for Q2

Shree Cement's Q2 results demonstrate strong performance across key metrics:

The company's financial robustness is evident from these figures, with significant year-on-year growth across all major financial indicators.

Operational Performance

• Total cement sales volume increased by 6.8% year-on-year
• Premium products now constitute 21.1% of total trade volume, up from 14.9% in the corresponding previous quarter

Capital Expenditure and Dividend

• Estimated capital expenditure of ₹3,000 crores for FY27
• The Board of Directors has declared an interim dividend of ₹80 per equity share

Strategic Asset Management

During Q2, Shree Cement transferred certain power transmission assets to the Government Transmission Corporation, resulting in a one-time charge of ₹23.68 crore to the Statement of Profit and Loss under "Other Expenses".

Market Outlook

The company remains optimistic about future demand, citing factors such as:

• Above-normal monsoon and healthy progress in kharif sowing
• Adequate reservoir levels
• Steady employment conditions
• Benign inflation
• Recent rationalization of GST rates

These factors are expected to stimulate infrastructure development and growth in the housing sector, potentially boosting cement demand in the near term.

Shree Cement's revised expansion strategy and strong financial performance demonstrate its ability to navigate market challenges while maintaining robust growth. The company's focus on operational efficiency, premium product sales, and strategic investments positions it well for sustainable long-term growth in India's dynamic cement market.