Shri Keshav — Q2 FY26 earnings call

Call held 18 Nov 2025

Management summary

Shri Keshav Cements & Infra Ltd. reported strong financial performance for Q2 and H1 FY26, driven by increased dispatches and improved realizations. The company achieved a significant turnaround in profitability, with EBITDA and PAT showing substantial year-on-year growth. Operational efficiencies, particularly from renewable energy and new kiln stabilization, contributed to margin expansion despite a challenging pricing environment and slower market demand in Q2. Management remains focused on market penetration, cost optimization, and future RMC business expansion.

Highlights

  • Q2 FY26 total income grew 42.81% YoY to INR 36.22 crores.

  • Q2 FY26 EBITDA increased 175% YoY to INR 8.38 crores, with EBITDA margin at 23.65%.

  • Q2 FY26 PAT was INR 0.69 crores, marking a turnaround from a loss in the prior year.

  • H1 FY26 total income rose 37.14% YoY to INR 77.62 crores, with EBITDA at INR 18.7 crores.

  • H1 FY26 EBITDA margin stood at 24.68%, reflecting a 444 basis points expansion.

  • Q2 FY26 incremental volume from the new kiln was 52% YoY, with total volume around 79,000 tons.

  • Naked cement price in Q2 FY26 was INR 3,460, slightly up from INR 3,430 in Q1 FY26.

  • The company aims for 70% utilization in FY27, targeting INR 70-80 crores total EBITDA including solar.

Concerns

  • Turbulent cement pricing environment

Key financials

3 periods

Headline

  • Capacity Utilization
    35%

Q2 FY26

  • Total Income
    ₹36.22 Cr
    YoY +42.8%
  • EBITDA
    ₹8.38 Cr
    YoY +175%
  • EBITDA Margin
    23.6%
  • PAT
    ₹0.69 Cr
  • EPS
    ₹0.39
  • Volume
    79,000 tons
  • Naked Cement Price
    ₹3,460
  • EBITDA per Metric Ton
    ₹350

H1 FY26

  • Total Income
    ₹77.62 Cr
    YoY +37.1%
  • EBITDA
    ₹18.7 Cr
    YoY +69%
  • EBITDA Margin
    24.7%
  • PAT
    ₹3.78 Cr
  • EPS
    ₹2.16

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.

Capital allocation

medium confidence
  • Capex Capex disclosed
    No CAPEX has been planned immediately. There are plans going on about solar and other things, but nothing has been materialized to a point where you could expect any kind of CAPEX coming up.
  • Debt Debt disclosed
    once that picks up, any cash accrual will be using towards reducing the debt.

Guidance & targets

Profitability

  • EBITDA per ton (cement only) Profitability · H2 FY26 · Medium confidence INR 350 to INR 450
    Now, assuming that price remains typically the same and has not significantly improved, so H2 should show a better EBITDA because our kilns stabilizes even further. Like what I have been discussing, our EBITDA is going to be in the similar range of what other major plants are going to be having very specifically in the South. So, if prices do not move, they remain as it is, then EBITDA range is going to be between INR 350 to INR 450, because the prices itself decide what EBITDA margins we are going to get.

    — Venkatesh Katwa

  • Total EBITDA Profitability · H2 FY26 · Medium confidence INR 45 to INR 50 crores
    If that stays on line, then our EBITDA is going to be between INR 45 to INR 50 crores. I would not say INR 60 crores with this kind of pricing.

    — Venkatesh Katwa

  • Total EBITDA (including solar) at 70% utilization Profitability · FY27 · High confidence INR 70 to 80 crores
    See, at the current levels, at 70%, our total EBITDA should easily cross on the cement plant including solar, should cross INR 70 to 80 crores, because if the prices remain, which itself is not a very good pricing, I would assume, INR 60 to 70 to 75 crores should not be a very difficult target.

    — Venkatesh Katwa

Volume

  • Sales Volume Volume · Medium confidence 60-80% of capacity
    If that happens, yes, we should be easily able to sell 60-70% or even 80% without much difficulty, because the area that we have covered is very, very significant now.

    — Venkatesh Katwa

New Business

  • RMC Plant Commissioning New Business · Q4 FY26 or Q1 FY27 · Medium confidence Commissioning
    So, as of now, we are still looking at by end of Q4 region or Q1 of next year is a tentative time when we will work on setting up. Setting up an RMC is pretty fast, typically takes about 45-days to 60-days and it is not very capital-intensive either.

    — Venkatesh Katwa

Cost Reduction

  • Fuel Consumption Cost Reduction · next couple of months · Medium confidence below 800 kilo calories
    So, we have to reach below 800 kilo calories, and we are reaching almost 850 to 900 kilo calories right now. So, it might take another couple of months before we reach that level.

    — Venkatesh Katwa

What to watch in Q3 FY26

Capacity Utilization Improvement

next quarter / H2 FY26
Current 35-36%
Target 50-60% or higher

Why it matters

Improved utilization is key to leveraging expanded capacity, reducing finance costs, and boosting overall profitability.

So, once we start catching up with the rated capacity, I mean, for example, we are still in the range of 35% to 36% capacity utilization. That is, once our plant was stabilized, the market has been a little slow, so, once that picks up, any cash accrual will be using towards reducing the debt.

Risks & concerns

  • Turbulent cement pricing environment

    high

    Cement prices have been turbulent, with Q2 FY26 naked cement price at INR 3,460, significantly lower than FY23/FY24 levels of INR 4,100, resulting in a loss of INR 600 in EBITDA per ton.

    Management acknowledged

  • Slow market demand and reduced off-take

    medium

    Local cement off-take reduced due to significant monsoons, labor unavailability (festivals, elections), and overall slow construction activity, impacting volume growth.

    Management acknowledged

  • Lower-than-desired capacity utilization

    medium

    Current capacity utilization is only 35-36%, which is below the level needed to fully leverage expanded capacity and reduce finance costs.

    Management acknowledged

Q&A highlights

8 direct
New market entry strategy Direct
So, the plan right now is we are focusing on North Karnataka and South Maharashtra. But due to turbulent prices in cement industry, we are not going further than about 200 to 250 kilometers. ... For now, Pune and Bangalore, we will be holding it up for some more time till there is a general improvement in the pricing.

Clarifies the company's cautious approach to market expansion due to current pricing volatility, prioritizing core regions and non-trade customers.

Asked by Ishita Sen

Finance cost reduction post-expansion Direct
So, once we start catching up with the rated capacity, I mean, for example, we are still in the range of 35% to 36% capacity utilization. That is, once our plant was stabilized, the market has been a little slow, so, once that picks up, any cash accrual will be using towards reducing the debt.

Indicates that debt reduction is contingent on improving capacity utilization and market conditions, linking financial leverage to operational performance.

Asked by Ishita Sen

Impact of new PH cyclones on heat efficiency and fuel cost Direct
With the new pre-heater equipment that we have put in, it is the most advanced one with the current technology. Of course, with that, we are expecting the fuel consumption to reduce, which it has reduced considerably now. So, marginal reduction is expected maybe this quarter, and we will reach to almost one of the most efficient plants by the end of this quarter.

Highlights ongoing operational improvements and their expected positive impact on fuel efficiency and overall cost structure, aiming for industry-leading efficiency.

Asked by Aditi Roy

Cement realizations in Q2 FY26 vs Q1 FY26 Direct
So, the rates have been pretty much flat, for example, in Q1 FY26, the naked cement price was around INR 3,430 and in Q2 it is INR 3,460. There is a slight dip in volumes, which is very cyclical and related to monsoon, which is typically seen in all the cement plants.

Provides specific realization figures and acknowledges the flat pricing environment and seasonal volume dip, confirming pricing pressure.

Asked by Aditi Roy

Strengthening dealer loyalty and retail footprint Direct
company is working on some digital marketing, also reaching out to the decision makers like engineers and everyone else, plus, there is a new loyalty program, which the company is willing to be launching very soon... we have a very good supply chain by which once there is a requirement, we typically deliver it in less than 12- hours or so.

Details strategic initiatives beyond pricing to build long-term relationships with dealers and end-users, emphasizing service and loyalty programs.

Asked by Ratan Shah

Difficulty in tracking cement prices and realization Direct
Now, naked cement price was something which said, what was the price at which you were selling, excluding logistics, taxes and everything just outside your gate, just a naked cement cost. But then now what is happening is the general term uses cement realization. ... For us, the only source right now is some of our dealers who also sell other brands. From there, we get most accurate information.

Explains the complexities and lack of transparent public data for cement pricing, highlighting the reliance on dealer networks for market intelligence.

Asked by Manan Vandur

FY27 EBITDA target at 70% utilization and current EBITDA per ton Direct
See, Manan, currently we are doing INR 1,100 EBITDA per ton if you look at including the solar power. Without any change itself, you will be INR 70 crores assuming that the pricing of cement does not change, the fuel cost does not change. So, it is just a simple math because then my fixed cost will virtually remain same.

Clarifies the significant contribution of solar power to the company's EBITDA per ton and reiterates the FY27 EBITDA target, providing a clear calculation basis.

Asked by Manan Vandur

Management's openness to a potential buy-out Direct
We will be really building cash flows in the air at this point in time. But when any opportunity strikes, of course, the shareholders will be the first people to know about it. We will also know it at that point in time. This is the right price for everything and anything in the world. So, if that happens, we will walk it with keeping in mind the shareholders' interest in mind.

Reveals management's pragmatic stance on M&A, indicating a willingness to consider a sale if it aligns with shareholder interests and fair valuation.

Asked by Manan Vandur

3 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance Overview

Shri Keshav Cements & Infra Ltd. delivered robust financial results for Q2 and H1 FY26. In Q2 FY26, total income reached INR 36.22 crores, marking a 42.81% year-on-year increase. EBITDA surged by 175% to INR 8.38 crores, with the EBITDA margin expanding to 23.65% from 12.44% in Q2 FY25. The company reported a PAT of INR 0.69 crores and an EPS of INR 0.39, signifying a turnaround from a prior-year loss. For the first half of FY26, total income grew 37.14% to INR 77.62 crores, and EBITDA increased by 69% to INR 18.7 crores, achieving a healthy margin of 24.68%.

Operational Efficiency & Cost Management

The company's operations are fully backed by renewable energy, providing a strong cost advantage. Electricity costs are among the lowest in the country due to 100% renewable power. Significant progress has been made in fuel consumption reduction, with current levels at 850-900 kilo calories, aiming to reach below 800 kilo calories within the next couple of months. The new pre-heater equipment and kiln stabilization are expected to further enhance heat efficiency and contribute to becoming one of the most efficient plants by the end of the current quarter.

Market Penetration & Dealer Network

Shri Keshav Cements serves North Karnataka, coastal Karnataka, Goa, and parts of Maharashtra through 350 distributors and over 600 retail touch points. The company is focusing on strengthening market penetration and improving reach, expanding volumes, and optimizing supply chain efficiencies. Initiatives include digital marketing, a new loyalty program for retailers, and ensuring quick delivery within 12 hours to maintain dealer fidelity. Despite a slow market in Q2 due to monsoons and labor unavailability, the company increased its cement division sales by 64%.

Pricing Environment and Outlook

The cement pricing environment has been challenging, with naked cement prices remaining relatively flat at INR 3,460 in Q2 FY26, only slightly up from INR 3,430 in Q1 FY26. This is significantly lower than FY23/FY24 levels of INR 4,100, resulting in a loss of approximately INR 600 in EBITDA per ton compared to those periods. Management expects prices and construction activity to improve by the end of November, which is crucial for achieving H2 FY26 EBITDA targets of INR 45-50 crores (or INR 350-450 per ton for cement only).

Capacity Utilization and Future Growth

Current capacity utilization stands at 35-36%, with management aiming to reach 50-60% or even 80% without much difficulty given the significant market area covered. The new kiln has stabilized and is contributing consistently. For FY27, at 70% utilization, the company targets a total EBITDA of INR 70-80 crores, including solar power benefits. The company is also exploring non-trade customers and has received approvals from various departments to develop these areas.

RMC Business and Capital Allocation

Plans for a Ready-Mix Concrete (RMC) plant, initially considered for a Q3 pilot, have been postponed to Q4 FY26 or Q1 FY27, awaiting cement price stabilization. The RMC setup is not capital-intensive, and all regulatory clearances are in place. No immediate CAPEX plans have been finalized for solar or other projects. The company intends to use cash accruals from improved capacity utilization to reduce debt. Management expressed openness to a potential buy-out if it aligns with shareholder interests and fair valuation.

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