Shri Keshav — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Shri Keshav Cements & Infra Ltd. reported a strong Q1 FY26 performance, driven by robust cement demand, steady solar contributions, and improved capacity utilization from its newly commissioned kiln. The company saw significant growth in income, EBITDA, and PAT, with EBITDA per ton improving substantially. While initial ramp-up issues led to a revised EBITDA guidance for FY26, management is confident in achieving stabilization and further efficiency gains, aiming to match South-based industry parameters in the coming quarters.

Highlights

  • Total income grew by 32.53% YoY to INR41.4 crores in Q1 FY26.

  • EBITDA rose to INR10.41 crores, achieving a margin of 25.5%.

  • Profit after tax surged by nearly 74% to INR3.09 crores.

  • EBITDA per ton for cement improved significantly from less than INR100 last year to over INR365 this quarter.

  • Solar operations contributed INR7.8 crores to the total EBITDA of INR11 crores, with a realization of INR5.98 per unit.

  • Cement capacity increased from 0.360 million tons to 1 million tons with the new kiln commissioned in March 2025.

  • FY26 EBITDA guidance revised to INR55-60 crores from an earlier INR70-75 crores due to initial ramp-up issues.

Key financials

  1. Total Income ₹41.4 Cr +32.5%YoY
  2. EBITDA ₹10.41 Cr
  3. EBITDA Margin 25.5%
  4. PAT ₹3.09 Cr +74%YoY
  5. EBITDA per Ton (Cement) ₹365
  6. Solar Realization ₹5.98

What they filed

Q1 FY27: revenue up 15.9%, net profit down 267.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue24 28 38 41 35 +45%38 +35%47 +23%47 +16%
EBITDA3 6 8 10 8 +175%11 +63%7 −12%8 −24%
Net profit-4 1 -4 3 1 +117%-1 −184%-10 −121%-5 −267%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of EBITDA Contribution
₹11 Cr Total
  • Solar ₹7.8 Cr 70.9%
  • Cement ₹3.2 Cr 29.1%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Cement capacity expansion (new kiln commissioned March 2025)
    • Solar power plant (40 MW total, 3 MW added last FY) ₹200 Cr
    Our cement plant is situated in Bagalkot and solar plants in Koppal, both in the North Karnataka region of the state. And our distribution network for cement spans in North Karnataka, Coastal Karnataka, Goa and parts of Maharashtra, supported by over 350 cement distributors and 600 retail touch points and over 14 solar power consumers. ... improved capacity utilization for new kiln commissioned in March 2025. ... Our other segment is solar. Solar last financial year, we added another 3 megawatt. So the total plant is of around 40 megawatts. Around INR200 crores has been capital expenditures on establishing this plant since 2018.
  • Debt Debt disclosed
    • Repayment Three term loans with an initial value of approximately INR104 crores (INR42 crores + INR62 crores) are closing this financial year (FY26). ₹104 Cr
    This year -- this financial year, we'll see three term loans being closed, out of which 2 one has already been closed out of the -- when there is a maturity. One term loan was closed ahead of time. In fact, another term loan was supposed to be closed in January, due to cash inflow, we closed ahead of time. And another term loan will get closed by March. ... So FY '26, we have around INR25.8 crores as a repayment liability in FY '26. So FY '27, it will go down to around INR20 crores to INR21 crores. And FY '28 onwards, it will be less than INR15 crores for the existing debt. This year is our largest -- this year is the only year we have where we have highest liability for term loan repayment.

Guidance & targets

Capacity Utilization

  • Cement Capacity Utilization Capacity Utilization · FY26 · High confidence 45%
    So as of first quarter, 36% is what is utilized because this being the first quarter itself. So we are targeting around 45% this year and then slowly wrap it up to about 60% -- 55% to 60% next year and around 70% in the following year.

    — Venkatesh Katwa

  • Cement Capacity Utilization Capacity Utilization · FY27 · High confidence 55-60%

    — Venkatesh Katwa

  • Cement Capacity Utilization Capacity Utilization · FY28 · High confidence 70%

    — Venkatesh Katwa

Profitability

  • EBITDA Profitability · FY26 · High confidence INR55-60 crores

    Previously INR70-75 crores → INR55-60 crores

    So reasonably, we are expecting EBITDA of around INR55 crores to INR60 crores this year compared to what we had predicted around INR70 crores, INR75 crores earlier.

    — Venkatesh Katwa

  • PAT Profitability · FY26 · Medium confidence INR25-30 crores
    So based on what I understand on how deferred tax liability is applicable, so about INR25 crores to INR30 crores is what I should expect. Typically, we are expecting very high PAT in Q3 and Q4, which we technically see in cement industry.

    — Venkatesh Katwa

  • EBITDA Margin Profitability · FY26 · High confidence 25-30%
    And margins would be around 25%? ... 25% to 30%, yes, we could safely assume.

    — Venkatesh Katwa

  • EBITDA Profitability · FY27 (with 65% utilization) · High confidence >INR100 crores
    With 65% to 70% production levels, INR100 crores EBITDA is a very safe bet. Yes, we should be able to do that.

    — Venkatesh Katwa

Debt

  • Debt Repayment Debt · next 3 years · High confidence INR70 crores
    Based on the current strategy for the existing debt, the debt will reduce to almost -- about 30% to 40% of debt will be repaid in the next 3 years or approximately you can say around INR70 crores of debt will be repaid in the next 3 years.

    — Venkatesh Katwa

Market Share

  • Institutional Contribution to Volumes Market Share · eventually · Medium confidence 20-25%
    So I mean, like with the kind of orders, with the kind of capacities what they want, I think so eventually somewhere we should stabilize between 20% to 22% or 25%.

    — Venkatesh Katwa

Pricing

  • Solar Pricing Realization Pricing · FY26 · High confidence INR5.9-6.0 per unit
    So Solar pricing will remain stabilized between 5.9 to 6 throughout the year.

    — Venkatesh Katwa

Capacity

  • Cement Capacity Capacity · eventually · Medium confidence 1.6-1.8 million tons

    From 1 million ton today

    So our current kiln is designed in such a manner that eventually we can increase the kiln output by which we could technically reach around 1.6 million to 1.8 million tons.

    — Venkatesh Katwa

What to watch in Q2 FY26

Cement Plant Stabilization & Full Operationalization

next quarter
Current Kiln operational since March 2025, balancing equipment being hooked up this month/next month.
Target Full capacity by end of Q2 FY26 without challenges.

Why it matters

Crucial for achieving targeted efficiency, EBITDA per ton, and overall profitability, and a prerequisite for RMC/solar capex decisions.

So as of first quarter, 36% is what is utilized because this being the first quarter itself. So we are targeting around 45% this year and then slowly wrap it up to about 60% -- 55% to 60% next year and around 70% in the following year. ... So we should be able to have a full capacity by the end of Q2 without any challenges, because most of the challenges, it looks like we have already overcome on it now.

Risks & concerns

  • Overcapacity in the South cement market

    medium

    South market has significant capacity additions and lower realizations compared to other regions, impacting pricing power.

    Analyst acknowledged

  • Volatile cement prices

    medium

    Naked cement prices reduced by 1.2% YoY, and Q2 was slow due to monsoons, though management expects robust demand post-monsoon.

    Management acknowledged

  • Initial ramp-up issues and delays in balancing equipment for new kiln

    medium

    Expected kiln efficiency from day one was not met due to teething issues and delays in supporting equipment, leading to a revised FY26 EBITDA guidance.

    Management acknowledged

  • Higher material costs due to lack of captive limestone mines

    medium

    The company purchases limestone locally due to an ownership dispute on its mining lease, leading to slightly higher material costs compared to competitors with captive mines.

    Analyst acknowledged

Q&A highlights

6 direct
Rationale for increasing cement capacity despite overcapacity in South Direct
The whole rationale for going for this CapEx was basically to increase our EBITDA margins or EBITDA per ton, which is what was lacking because of very high fuel and power consumption. So as expected since the kiln has just started and as we kind of stabilize, the EBITDA per ton has grown now from around hardly INR100 or less than INR100 last year to over INR365 this year -- this quarter.

Analyst questioned the strategic decision given regional overcapacity; management clarified it was for margin improvement through efficiency and government project eligibility.

Asked by Priyank

Achieving comparable EBITDA per ton to South-based industry average Direct
As we move along, as we stabilize our plant, of course, it has just been 1 quarter and we have not got fully the desired results what we were expecting. But then again, as we continue to operationalize the plant, as we continue to enhance our efficiency, eventually, by another couple of quarters, we should be able to be close to what we see in the Southern region.

Analyst probed if the company could reach the higher industry average EBITDA/ton; management provided a timeline for achieving this through stabilization and efficiency.

Asked by Priyank

Ability to repay debt through internal accruals Direct
I believe so, yes. This year also, with the increase, if you look at the Q1 results and EBITDA margins and cash profits, we are at cusp of the point where our realization will start going up, sales will start going up, profit will start going up and the borrowings will start going down. So I'm pretty confident that for this year, we should be able to repay the loan through internal accruals. And if there is any shortage, the management will always pour in funds when there is a need.

Analyst questioned funding for debt repayment given it's the first year of new plant operations; management expressed high confidence in internal accruals and promoter support.

Asked by Priyank

Revision of FY26 EBITDA guidance Direct
So typically, what happened was we expected the kiln to perform efficiently right from day 1, which of course, we had a little ramping up issues with the kiln. And some of the balancing equipment which will add to the kiln capacity have been a little slow in implementation. So they are almost in the final stages right now because of which we don't want to be over the board. So 45% as of now with the current cement scenario appears to be reasonable.

Analyst noted a downward revision in EBITDA guidance; management attributed it to initial ramp-up issues and delays in balancing equipment, providing a realistic current outlook.

Asked by Bharat

High material cost compared to competitors Partial
So I mean so to do a little apple-to-apple comparison, most of the cement plants do have what you call WHS and WHR and other sales. So currently, as I can say, when we look at EBITDA per ton would be the correct way to look at it, because for example, like even though we have not reached the optimum level of fuel and power utilization. But even now, we are not more than 25% to 30% away from what they have achieved.

Analyst highlighted a significant cost discrepancy; management explained it by lack of captive mines and sub-optimal efficiency for the new kiln, suggesting EBITDA/ton is a better comparison.

Asked by Kartik Raja

Ramp-up plan for the new kiln and resolution of technical glitches Direct
So no, we definitely have an excellent support from our suppliers. But again, like cement plant, hardcore machinery, hardcore metals everywhere. For example, kiln, even though we expected kiln did not give any mechanical problems, but then since the balance equipment was not ready yet, the fuel consumption was a little higher. So since the balance equipment is getting ready by the end of -- by this month or maximum by next month, so then we would be able to see kiln performing at the levels what the suppliers have promised us and given the guarantees at this point in time.

Analyst inquired about the progress and challenges in achieving full capacity; management confirmed most issues are resolved and full operationalization is imminent.

Asked by Kartik Raja

Future vision for renewable capacity by 2030 Direct
So typically, what the management thinks is management is capable in two things very good. One is cement another is establishing solar renewable power. And we have next year experience. So what we believe in is even though we are building new solar capacities for captive consumption, but solar industry itself, the renewable power itself has a very high -- it has got a good future, mainly because of a couple of things. One, eventually, solar would be the only way you could produce the cheaper hydrogen.

Analyst sought management's long-term vision for renewable energy; management outlined its strategic importance for captive consumption and future energy solutions like green hydrogen.

Asked by Kartik Raja

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

Shri Keshav Cements & Infra Ltd. reported a strong start to FY26 with total income growing by 32.53% year-on-year to INR41.4 crores. EBITDA for the quarter stood at INR10.41 crores, achieving a healthy margin of 25.5%. Profit after tax (PAT) saw a significant surge of nearly 74% to INR3.09 crores, reflecting the benefits of capacity expansion, improved product mix, and disciplined cost control.

Cement Capacity Expansion and Utilization

The company's new kiln, commissioned in March 2025, has increased cement capacity from 0.360 million tons to 1 million tons. Capacity utilization for Q1 FY26 was 36%, with targets set at 45% for FY26, 55-60% for FY27, and 70% for FY28. Management expects full operationalization of balancing equipment by the end of Q2 FY26, which will help achieve these utilization targets and further improve efficiency.

Solar Power Operations and Contribution

The solar segment continues to be a significant contributor to the company's profitability, providing a stable low-cost energy backbone. In Q1 FY26, solar operations contributed INR7.8 crores to the total EBITDA of INR11 crores, with a realization of INR5.98 per unit. The company's total solar capacity is 40 MW, with 3 MW added in the last financial year, and management is considering adding another 30 MW after cement plant stabilization.

Debt Management and Repayment Outlook

The company is actively managing its debt, with three term loans totaling approximately INR104 crores (initial value) scheduled to close in FY26. The repayment liability for FY26 is INR25.8 crores, which is the highest, and is projected to decrease to INR20-21 crores in FY27 and less than INR15 crores from FY28 onwards. Management is confident in repaying these loans through internal accruals, with a cumulative target of INR70 crores repaid over the next three years.

Market Strategy and Institutional Sales

Shri Keshav is focusing on increasing its market share in existing regions like North Karnataka, Coastal Karnataka, Goa, and parts of Maharashtra, where its average market share is currently 3-4%, with a potential to reach 5-6%. Institutional sales, particularly from government projects like KRIDL, contributed 8-9% to volumes in Q1 FY26, with a target to reach 10-12% in Q2 and eventually 20-25%. Institutional realizations are at least 10% higher than existing net realizations.

Cost Structure and Efficiency Improvements

EBITDA per ton for cement improved significantly from less than INR100 last year to over INR365 this quarter. While the company faces slightly higher material costs due to purchasing limestone locally (compared to competitors with captive mines), management expects to narrow the gap in efficiency and cost. The new kiln and improved operational parameters are anticipated to help the company's EBITDA per ton approach the South-based industry average of INR560 within a couple of quarters.

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