Shri Keshav Cement & Infra has reported a strong performance for the second quarter of fiscal year 2026, with significant improvements in revenue and profitability. The company's strategic focus on operational efficiency and market expansion has yielded positive results, despite challenging market conditions in the cement industry.

Financial Highlights

• Total income for Q2 FY26 reached INR 36.22 crores, marking a 42.81% year-on-year increase.
• EBITDA grew by 175% to INR 8.38 crores, with margins expanding to 23.65% from 12.44% in Q2 FY25.
• The company achieved a turnaround with a Profit After Tax (PAT) of INR 0.69 crores, compared to a loss in the previous year.

Operational Performance

Shri Keshav Cement & Infra attributed its improved performance to several factors:

• Higher cement dispatches, increasing by 53% year-on-year to 78,995 tons in Q2 FY26.
• Better realizations, with naked cement prices at INR 3,460 per ton.
• Consistent performance from the new kiln, backed by renewable energy operations.

Market Challenges and Outlook

Despite the positive results, the company faced some headwinds:

• Cement prices in the region remained under pressure, with current levels below those seen in FY23 and FY24.
• Fuel costs increased to INR 13,100 per ton in Q2 FY26, up from INR 11,700 in Q2 FY25.

Chairman Venkatesh Katwa commented on the market conditions, stating, "Assuming that the construction work, the pent-up demand should come up. If that happens, yes, we should be able to reach [higher utilization], because our quantity of 1 million ton is very insignificant."

Future Prospects

The company outlined several initiatives and expectations for the future:

• Aiming for 50-60% capacity utilization by the end of the fiscal year.
• Exploring entry into the Ready-Mix Concrete (RMC) market, with potential implementation by Q4 FY26 or Q1 FY27.
• Focusing on expanding institutional sales and geographical reach.
• Expecting EBITDA to potentially reach INR 45-50 crores for the full fiscal year, assuming market conditions improve.

Competitive Advantage

Shri Keshav Cement & Infra highlighted its unique position in the market:

• The company operates on 100% solar power, providing a significant cost advantage.
• EBITDA per ton, including solar benefits, stands at approximately INR 1,130.

Investors and analysts will be watching closely to see if Shri Keshav Cement & Infra can capitalize on its recent improvements and navigate the challenging cement market in the coming quarters. The company's focus on renewable energy and operational efficiency may provide a strong foundation for future growth, particularly if construction activity and cement prices in its key markets show signs of improvement.

Shri Keshav Cement & Infra has reported a significant improvement in its financial performance for the second quarter. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) witnessed a substantial jump of 132% year-on-year, reaching Rs. 918.08 Lakhs.

Key Financial Highlights

• EBITDA margin improved from 15.5% to 25.4% year-on-year
• Cement dispatches increased by 52% compared to the same quarter last year
• Sales volume grew by 64% year-on-year

Segment-wise Performance

The company's performance across its various business segments for the quarter is as follows:

The cement segment continues to be the primary revenue driver for the company, while the solar energy segment reported a loss for the quarter.

Financial Position

As of the end of the quarter, Shri Keshav Cement & Infra reported:

• Total assets of Rs. 42,155.69 Lakhs
• Total liabilities of Rs. 32,151.51 Lakhs
• Equity share capital of Rs. 1,751.28 Lakhs

Auditor's Observations

The company's auditors, Singhi & Co., have raised a concern in their limited review report. They noted that Shri Keshav Cement & Infra has made an advance payment of GST amounting to Rs. 641.52 Lakhs, plus interest and penalties of Rs. 218.11 Lakhs in the financial years 2020-21 and 2021-22. This payment was based on a search conducted by GST Intelligence at the company's premises, pertaining to liabilities for the financial years 2018-19 and 2019-20.

The auditors highlighted that the investigation by the Directorate General of GST Intelligence (DGGI) is not yet complete. These amounts are currently included as part of other current assets in the financial statements. Due to the ongoing nature of the investigation and the absence of final orders, the auditors were unable to comment on the potential impact on the financial results.

Management's Response

The company's management has not provided any specific comments on the auditor's observations in the released financial results. Investors and stakeholders may seek further clarification on this matter in upcoming communications or during the next earnings call.

Despite the noted concern, Shri Keshav Cement & Infra has demonstrated strong operational performance in the second quarter, with significant growth in its core cement business. The company's ability to improve its EBITDA margin substantially indicates effective cost management and operational efficiency. However, the ongoing GST investigation remains a point of attention for investors to monitor in the coming quarters.