Shri Keshav — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

Shri Keshav Cements reported a strong Q3 and 9 Months FY26, driven by improved capacity utilization, strategic market penetration, and the cost advantage from its integrated solar operations. The company achieved significant growth in revenue and EBITDA, turning profitable for the nine-month period. Debt reduction efforts are also underway, positioning the company for sustained performance despite competitive market conditions in the Southern region.

Highlights

  • Total income for 9 months FY26 increased by 35.81% YoY to INR 116.31 crores.

  • EBITDA for 9 months FY26 stood at INR 29.28 crores, reflecting a growth of 66.85%.

  • EBITDA margin for 9 months FY26 expanded to 25.68%, an improvement of 454 basis points.

  • PAT for 9 months FY26 was INR 3.23 crores, compared to a loss in the previous year.

  • Q3 FY26 total income grew by 33.22% YoY to INR 38.69 crores.

  • Q3 FY26 EBITDA increased by 63.1% to INR 10.5 crores, with margin improving by 477 basis points to 27.68%.

  • Cash profit for Q3 FY26 was INR 4.03 crores, an 89% jump YoY.

  • Term debt reduced from INR 188 crores to INR 159 crores, a 15% reduction.

Key financials

2 periods

Q3 FY26

  • Total Income
    ₹38.69 Cr
    YoY +33.2%
  • EBITDA
    ₹10.5 Cr
    YoY +63.1%
  • EBITDA Margin
    27.7%
  • Cash Profit
    ₹4.03 Cr
    YoY +89%
  • Volume
    78,000 tons
    YoY +32%

9M FY26

  • Total Income
    ₹116.31 Cr
    YoY +35.8%
  • EBITDA
    ₹29.28 Cr
    YoY +66.8%
  • EBITDA Margin
    25.7%
  • PAT
    ₹3.23 Cr
  • EPS
    ₹1.85

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

high confidence
  • Debt Gross ₹159 Cr
    • Repayment FY26 debt obligation, with ~INR 26-27 crores already repaid and remaining by March. ₹29 Cr
    • Repayment FY27 debt obligation. ₹23 Cr
    • Repayment FY29 debt obligation. ₹19 Cr
    In fact, my term debt is reducing, as I mentioned in my opening remarks, our term debt has reduced from INR188 crores to INR159 crores, a reduction of 15%.
  • Liquidity Liquidity disclosed Cash flow is comfortable, allowing all debt repayments to be done on time. Management plans to impair debt ahead of schedule once 50%+ utilization levels are reached.
    So cash flow as such is comfortable, which is why you could see all the repayments are being done on time. For the debt servicing, when there is once we start reaching 50-plus utilization levels, we're expecting a lot of additional cash flows or residual cash flows, which will go towards impairing the debt ahead of the schedule. That is the plan the management has.

Guidance & targets

Capacity Utilization

  • Capacity Utilization Capacity Utilization · this year (FY26) · High confidence 40%
    So we are expecting to sign off this year by around 40% utilization.

    — Venkatesh Katwa

  • Capacity Utilization Capacity Utilization · next year (FY27) · High confidence 45-55%
    Maybe next year, we are targeting around 45% to 55% capacity utilization in case the market still remains compressed or having challenges of overcapacity.

    — Venkatesh Katwa

  • Capacity Utilization Capacity Utilization · effortlessly if market pulls · Medium confidence 60%
    If there is a slight pull in the market, like there is -- in every department, if there is an improvement in this thing, we should be able to reach 60% effortlessly.

    — Venkatesh Katwa

Clinker to Cement Ratio

  • Clinker to Cement Ratio Clinker to Cement Ratio · a quarter down the line · Medium confidence 1.9-2 tons of cement per ton of clinker

    From 1.6-1.8 tons today

    So we are expecting to reach around 1.9 to 2, not in this quarter, maybe a quarter down the line from this point onwards.

    — Venkatesh Katwa

Cost Savings

  • Annual Solar Power Savings Cost Savings · annually · High confidence INR 25-26 crores
    So for around 6 crore units, saving of around roughly about INR4.5 would translate to around INR25 crores to INR26 crores actual savings coming from solar usage in the cost itself, in the operating cost.

    — Venkatesh Katwa

EBITDA

  • EBITDA (FY26) EBITDA · this year (FY26) · High confidence INR 40-45 crores
    Let's say, for example, by 9 months, our EBITDA has come to around INR31.5 crores. So maybe this year, we'll sign off with INR40 crores to INR45 crores EBITDA, which is assuming around 30%, 31%, 32% capacity utilization.

    — Venkatesh Katwa

  • EBITDA (at 60% utilization) EBITDA · future · High confidence INR 90-100 crores
    At 60% capitalization, we should be comfortable reaching around INR90 crores to INR100 crores EBITDA.

    — Venkatesh Katwa

Power Price

  • Power Selling Price Power Price · end of FY27 · High confidence < INR 1

    From INR 6 today

    By end of FY '27, we expect our price of power to go down less than INR1, whereas we are selling at INR6.

    — Venkatesh Katwa

ROCE

  • Return on Capital Employed ROCE · future (at 65% utilization) · Medium confidence 25-30% increase
    If we increase this thing, our ROCE is expected to at least increase by 25% to 30%.

    — Venkatesh Katwa

What to watch in Q4 FY26

Clinker to Cement Ratio Improvement

next quarter
Current 1.6-1.8 tons of cement per ton of clinker
Target 1.9-2 tons of cement per ton of clinker

Why it matters

Improvement in this ratio indicates enhanced operational efficiency and cost optimization, directly impacting profitability.

So we are expecting to reach around 1.9 to 2, not in this quarter, maybe a quarter down the line from this point onwards.

Risks & concerns

  • Price volatility from large players' discounting strategy

    medium

    Southern market experienced aggressive pricing due to overcapacity and consolidation, impacting all players including Shri Keshav.

    Both acknowledged

  • Fuel cost volatility (petcoke, coal)

    medium

    Company is 100% dependent on fossil fuels; high coal/petcoke prices would severely impact profitability, though alternative fuels are being considered for the future.

    Both acknowledged

  • Capacity ramp-up taking longer than expected

    low

    Management noted that cement dispatches did not uptick as expected in Q3/Q4, leading to a delay in RMC project consideration until higher utilization is achieved.

    Management acknowledged

  • Regulatory changes affecting solar generation efficiency

    low

    Management believes current regulatory benefits for solar plants will continue, and future common charges won't specifically hamper their cost structure.

    Analyst downplayed

Q&A highlights

8 direct
Clinker to cement ratio and post-modernization improvement Direct
So currently, clinker to for 1 ton of clinker, we are able to produce around 1.6 tons of cement, 1.6 to 1.8 tons. So we are expecting to reach around 1.9 to 2, not in this quarter, maybe a quarter down the line from this point onwards.

Analyst inquired about operational efficiency, and management provided a specific target for clinker utilization, indicating future cost optimization.

Asked by Anurag Jain

Solar power cost savings and regulatory risks Direct
So for around 6 crore units, saving of around roughly about INR4.5 would translate to around INR25 crores to INR26 crores actual savings coming from solar usage in the cost itself, in the operating cost. ... As of now, there are no regulatory challenges happening, and I don't foresee any kind of regulatory changes coming in future, which could hamper our cost structure.

This question clarified the significant financial benefit from captive solar power and addressed potential regulatory headwinds, which is a key competitive advantage for the company.

Asked by Anurag Jain

Exposure to price volatility from large players' discounting strategy Direct
Yes. To a large extent, every cement player in the industry will be exposed to the challenges faced currently by a lot of consolidation. ... So yes, so because the larger players are competing and there is aggressive pricing strategy used by some top players, it has, to some extent, impacted all the other players, including us.

This question highlighted a significant industry-wide risk, and management acknowledged its impact, providing context for market conditions in the Southern region.

Asked by Sakshi Shinde

PAT showing a loss despite positive EBITDA Direct
So Pooja, the reason why we it shows negative is because there is something called a deferred tax liability, which appears because of a huge difference in the depreciation on the books and as per income tax, which is basically an Ind AS adjustment, but not a cash expense as what it portrays.

This clarified a potential red flag in the financial statements, explaining that the reported PAT loss was due to non-cash accounting adjustments rather than operational underperformance.

Asked by Pooja Mishra

Impact on margins if cement prices decline by 5-7% Direct
Of course, it would impact 7% reduction in prices will mean it will chop off the EBITDA to that extent. But in my case, the impact is a little lesser only because we have a renewable backup, which is generally not the case in all the other competing cement plants in our region or outside.

This question probed the company's resilience to pricing pressure, and management highlighted its green energy advantage as a buffer against severe margin erosion.

Asked by Raj Shah

Vulnerability to coal/pet coke price spikes Direct
So, right now we are 100% dependent on fossil fuels like petroleum coke and petcoke. Although the management is considering to look at AFR once a plant stabilizes to a certain capacity, which might take another 2 or 3 quarters. ... But yes, pretty much at this point in time, if coal price is very high that way, it will impact us more severely than the one who has got an EFR at this point in time.

This addressed a key cost risk for the sector, with management acknowledging current dependency while hinting at future alternative fuel plans to mitigate this vulnerability.

Asked by Raj Shah

Status of RMC (Ready Mix Concrete) projects and land purchase Direct
But for the sake of RMC, the company has already purchased the land. We are pretty sure once some positive figures start flowing in from cement vertical, RMC is going to be immediate next step. ... Yes. We have purchased land to set up an RMC project in a city called Belgaum.

This revealed a future growth avenue and confirmed a tangible step (land purchase) towards diversification, indicating strategic expansion plans beyond core cement manufacturing.

Asked by Manthan Rastogi

Limestone sourcing for increased capacity utilization Direct
Not at all because we are the only purchasers of limestone in that area with around 20 to 30 suppliers. So at this point in time, we are well poised with the limestone requirement and the availability of the basic raw material. ... Not at this capacity, not at all.

This addressed a critical raw material supply risk, assuring analysts that current and future higher utilization levels are not constrained by limestone availability.

Asked by Manthan Rastogi

2 min read 5 chapters

Detailed narrative

Strong Financial Performance in Q3 & 9M FY26

Shri Keshav Cements delivered robust financial results for Q3 and 9 Months FY26. For the nine-month period, total income surged by 35.81% year-on-year to INR 116.31 crores. EBITDA saw an even stronger growth of 66.85% to INR 29.28 crores, with the EBITDA margin expanding by 454 basis points to 25.68%. The company also turned profitable with a PAT of INR 3.23 crores, compared to a loss in the previous year, and reported an EPS of INR 1.85. Q3 FY26 alone saw total income grow by 33.22% to INR 38.69 crores and EBITDA by 63.1% to INR 10.5 crores, with a margin of 27.68%.

Operational Efficiency and Strategic Advantages

The company's operational progress is marked by the stabilization of its new kiln and a focus on improving capacity utilization. Integrated solar operations, with 25 MW utilized for captive consumption and 15 MW sold, provide a significant structural cost advantage, contributing INR 25-26 crores in annual operating cost savings. This enables the company to remain competitive and maintain healthy operating margins. The clinker to cement ratio is expected to improve from 1.6-1.8 tons to 1.9-2 tons of cement per ton of clinker in the coming quarter, further enhancing efficiency.

Market Penetration and Regional Expansion

Despite the Southern market experiencing negative growth and aggressive pricing strategies from larger players, Shri Keshav Cements achieved a 32% year-on-year volume growth. This was driven by aggressive marketing, new product additions like GGBS (granulated ground-based slag), and expansion into new markets. The company is leveraging its location on the Karnataka-Maharashtra border to penetrate Western markets like Coastal and Southern Maharashtra, which were previously unaddressed, thereby diversifying its market presence and reducing reliance on the competitive Southern region.

Capital Structure and Debt Management

The company has made significant strides in strengthening its capital structure. Term debt has been reduced by 15%, from INR 188 crores to INR 159 crores. The repayment obligation for the next financial year is also set to reduce by 16.4% due to the closure of three term loans in FY26. The FY26 debt obligation is around INR 29 crores, with INR 26-27 crores already repaid. Management aims to further impair debt ahead of schedule once capacity utilization reaches 50%+, indicating a strong focus on financial prudence.

Future Outlook and Capacity Targets

Shri Keshav Cements is optimistic about its future growth trajectory. The company expects to achieve around 40% capacity utilization by the end of FY26, targeting 45-55% in FY27. If market conditions improve, utilization could effortlessly reach 60%. At 60% utilization, EBITDA is projected to grow almost twofold, potentially reaching INR 90-100 crores, compared to the INR 40-45 crores expected for FY26 at 30-32% utilization. The company also plans to explore the Ready Mix Concrete (RMC) segment, having already purchased land for a project in Belgaum.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Construction Materials earnings calls