Shri Keshav — Q4 FY25 earnings call

Call held 2 Jun 2025

Management summary

Shri Keshav Cements & Infra Ltd. reported a stable FY25 total income of ₹124.6 crores with an EBITDA of ₹25.17 crores, despite macroeconomic headwinds and a significant drop in cement realization. The company successfully commissioned its new 1 million TPA kiln and expanded solar power capacity to 40 MW. Management expressed optimism for FY26, driven by stabilized new capacity, improved demand, and strategic market penetration initiatives.

Highlights

  • Total income for FY25 remained stable at ₹124.6 crores.

  • EBITDA for FY25 stood at ₹25.17 crores, maintaining a healthy margin of 20.73%.

  • The newly commissioned kiln began operations in March 2025, expanding cement capacity to 1 million tons per annum.

  • An additional 3 Megawatt of renewable power was added, bringing total capacity to 40 Megawatt.

  • Net realization decreased by around ₹425 compared to FY24, with Q4 FY25 naked realization around ₹3,350.

  • Debt of around ₹26 crores was repaid in FY25, with long-term borrowings increasing by only ₹4 crores to ₹169 crores despite new capex.

  • The company secured a credit rating upgrade for long-term bank facilities from IVR BB positive to IVR BBB minus.

Concerns

  • Decline in net realization for cement and renewable power

Key financials

  1. Total Income ₹124.6 Cr
  2. EBITDA ₹25.17 Cr
  3. EBITDA Margin 20.7%

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
  • Capex ₹130 Cr approaching the bank and getting that funded through a nationalized bank only.
    • 30 Megawatt solar plant expansion ₹130 Cr
    So, CAPEX allocation for FY '26 unless we come up with 30 Megawatt, there is not going to be any CAPEX, but if there is a CAPEX, the typical project cost is going to be around Rs. 130 crores to Rs. 135 crores for a 30-Megawatt solar plant. The entire CAPEX, yes. So, please go ahead. Typically, we will be approaching the bank and getting that funded through a nationalized bank only.
  • Debt 1.2× EBITDA
    • Repayment around Rs. 26 crore debt has been repaid. ₹26 Cr
    • New borrowing long-term borrowings have increased from Rs. 165 crores to Rs. 169 crores. Increase of just Rs. 4 crores. ₹4 Cr
    So, as such, right now, our debt-to-equity is, I think, less than 2. And management, the newest debt which has come up last year is because of this CAPEX, which is showing on the books. However, the benefits of the debt is going to accrue this year. So, as we move forward, the current profitability as well as from the improved margins, we will start paying the debts as when company has some excess cash that will be generating.

Guidance & targets

Profitability

  • EBITDA Profitability · FY26 · Medium confidence ₹70 crores plus
    And with respect to the new kiln, which the project has been commissioned, I think, so, the plant has been stabilized. And with respect to the guidance which we shared earlier of Rs. 70 crores plus I think EBITDA for FY '26, like are we sticking to it?

    — Venkatesh Katwa

  • PBT Profitability · FY26 · Medium confidence ₹30 to 35 crores
    What I could give a foresight is on PBT, Profit Before Tax. And with EBITDA of around Rs. 70 crores, you can expect a PBT to be around Rs. 30 to 35 crores. So, that's the kind of foresight we are having for this year.

    — Venkatesh Katwa

Capacity

  • Cement Capacity Capacity · Ongoing · High confidence 1 million tons
    And regarding cement, you know, as such, we are going to continue with 1 million tons.

    — Venkatesh Katwa

  • Solar Power Capacity Capacity · FY26 · Medium confidence 30 Megawatt additional
    So, as said, the discussion has been going on internally to add another 30 Megawatt, but like discussed last time, it has not come to a final conclusion yet. And if it happens, there is going to be an additional 30 Megawatt adding up this financial year.

    — Venkatesh Katwa

  • Solar Power Capacity Capacity · next three to five years · Medium confidence beyond 100 Megawatt
    And after that, in the next three to five years, the company does have plans to increase the renewable power capacity to beyond 100 Megawatt.

    — Venkatesh Katwa

Capacity Utilization

  • Overall Capacity Utilization Capacity Utilization · FY26 · High confidence 50%
    So, we would be able to achieve the rated 50% utilization throughout for the FY '26 and we think we are already on the course of it as of now.

    — Venkatesh Katwa

Tax

  • MAT Rate Tax · next couple of years · High confidence 15% to 16%
    So, since we already have a lot of carry forward depreciation loss in the income tax books, we would be looking forward to have the MAT, which is around 15% to 16% for next couple of years.

    — Venkatesh Katwa

Expenses

  • Interest Amount Expenses · FY26 · Medium confidence ₹25 crores
    So, this year with the new CAPEX, the interest amount is going to be in the range of around Rs. 25 crores with the new addition of the loan.

    — Venkatesh Katwa

  • Depreciation Amount Expenses · FY26 · Medium confidence ₹18 to 20 crores
    And depreciation is going to be also in the range of around Rs. 18 to 20 crores.

    — Venkatesh Katwa

Realization

  • Solar Power Price Realization · FY26 · High confidence ₹6
    So, it looks like based on the current approvals or whatever guidance we have, we should reasonably get around Rs. 6 for this financial year.

    — Venkatesh Katwa

Market context

  • Positive PAT Profitability · FY26 · High confidence Positive
    But this year, we should be able to achieve positive PAT, definitely.

    — Venkatesh Katwa

What to watch in Q1 FY26

Kiln Stabilization and Rated Capacity Achievement

by the end of this quarter
Current Reached 77% of rated capacity
Target Rated capacity achieved

Why it matters

Full stabilization of the new kiln is crucial for achieving targeted production volumes and profitability.

However, the new kiln has just commissioned by end of March. So, we are going through the standard operating procedures and slowly the kiln is improving its performance. And as we speak, we are almost reached 77% of its rated capacity, expect to reach the rated capacity by the end of this quarter.

Risks & concerns

  • Decline in net realization for cement and renewable power

    high

    Net realization decreased by ₹425 compared to FY24, and cement/renewable prices reduced by 11.5% and 12% respectively in Q4 FY25.

    So, if I do some comparison about the naked cement rate, which is what we use as a benchmark to understand the net realization, so compared to FY '24, the net realization decreased by around 425, which was a major impediment in achieving the EBITDA margins as well as EBITDA figures. Even the Q4, in spite of our capacity utilization reaching 92% from 79.5% in the Q4 FY '24, the cement price reduced by almost 11.5% and even the renewable price also reduced by about 12%.

    Management acknowledged

  • Subdued revenue pressures due to macroeconomic and sectoral headwinds

    medium

    FY25 saw recalibration amid macroeconomic and sectoral headwinds, leading to revenue pressures.

    FY '25 was a year of recalibration amid macroeconomic and sectoral headwinds. While total income for the year remains stable at Rs. 124.6 crores, our EBITDA stood at Rs. 25.17 crore, maintaining a healthy margin of 20.73%, despite revenue pressures driven by subdued infrastructure demand and policy uncertainties around renewables.

    Management acknowledged

  • Impact of early monsoons on dispatches

    medium

    Early monsoons have caused a step down in dispatches, but management hopes it will be short-lived.

    However, the early monsoons have kind of shown a little step down on the dispatches, but we are hoping that these monsoons are going to be short lived and again before the real monsoons arrive, there should be an uptick in the demand as well as dispatches.

    Management acknowledged

  • Regulatory framework for selling renewable power

    medium

    Current regulations make selling renewable power less promising without captive consumption incentives.

    No, as such right now the incentives are only applicable to the captive power generation. So, which is why the company is considering to set up another 30 Megawatt because our existing power plants do already have incentives when we sell the power. But today, if we have to set up a renewable power only to sell, I wouldn't consider it a very promising industry as such due to be the current regulatory framework.

    Management acknowledged

Q&A highlights

8 direct
Price realization trend in Q4 FY25 and Q1 FY26 Direct
So, if I do some comparison about the naked cement rate, which is what we use as a benchmark to understand the net realization, so compared to FY '24, the net realization decreased by around 425, which was a major impediment in achieving the EBITDA margins as well as EBITDA figures. Even the Q4, in spite of our capacity utilization reaching 92% from 79.5% in the Q4 FY '24, the cement price reduced by almost 11.5% and even the renewable price also reduced by about 12%. So, typically, the naked realization was around 3,350 in FY '25, similar which is in Q4 itself. However, there was some beginning to increase of the price by the end of March and there seemed to be some better realizations going on in Q1 of this year.

Analyst sought clarity on pricing trends, which management confirmed were challenging in FY25 but showing signs of improvement in Q1 FY26, impacting profitability.

Asked by Bharat Gupta

Demand recovery and new capacity stabilization Direct
So, as far as demand revival, yes, there has been a strong demand revival in the Q1 itself of this year because there has been a general uptick in consumption of cement. Of course, the first two months, which are like April and May, was pretty much in line with our targets. We increased the sales. However, the early monsoons have kind of shown a little step down on the dispatches, but we are hoping that these monsoons are going to be short lived and again before the real monsoons arrive, there should be an uptick in the demand as well as dispatches. And with respect to the new kiln, which the project has been commissioned, I think, so, the plant has been stabilized.

Analyst inquired about demand outlook and the stability of the new kiln, which management confirmed is stabilized and demand is showing revival despite early monsoon impact.

Asked by Bharat Gupta

Solar capacity expansion plans for FY26 and beyond Direct
So, for this year, if anything has to happen regarding renewable power, it is going to be an addition of 30 Megawatt. And after that, in the next three to five years, the company does have plans to increase the renewable power capacity to beyond 100 Megawatt. And that's the timeline what we are thinking about.

Analyst sought clarity on the company's renewable energy expansion roadmap, which management outlined with specific targets for FY26 and long-term.

Asked by Abhishek Sharma

Payback period for kiln modernization and solar expansion Direct
Kiln modernization, we are talking about seven to eight years is a typical payback period with the kind of power and fuel savings. And solar also typically about six to seven years based on current regulatory cost and the pricing available.

Analyst asked about the financial viability of recent investments, and management provided typical payback periods for both projects.

Asked by Abhishek Sharma

Current captive consumption versus external sales ratio for solar power Direct
So, right now as we speak, our captive consumption for this, I mean, till last year it was around 40%-45% was captive consumption. This year with the 1 million ton, taking up to nearly 50%-60% capacity, we are hoping to achieve around maybe about 60%-65% of power to be utilized captively within the existing 40 Megawatt. And balance will be sold. Once we reach around 80% to 85%, we will be utilizing around 95% of our renewable power capacity.

Analyst questioned the utilization strategy for solar power, and management detailed the increasing captive consumption with capacity expansion.

Asked by Abhishek Sharma

Timeline for 30 Megawatt solar expansion Direct
So, technically, once we start the project, it will take roughly around about 9 months to 12 months with all from the point of getting the approach all the way till the date of commissioning.

Analyst asked about the execution timeline for the planned solar expansion, providing clarity on project duration.

Asked by Hemnath

Impact of government infrastructure pipeline on SKCI Direct
But now with the 1-million-ton plant, we would be qualified and then looking forward to venture into government-related projects. Government has got a huge push as well as rural housing and highways and other infrastructure projects. And I believe we are already seeing that benefits in this quarter and will more likely continue in this entire year.

Analyst inquired about the company's positioning to benefit from government projects, which management confirmed is now possible with increased capacity.

Asked by Riya Gandhi

Prioritization of solar vs. cement capacity addition Direct
Yes, as the company continues to grow, the moment we have the stabilization, cash flow generating, the next course of action is going to be addition in both renewable as well as cement. There is still a scope for us to improve the capacity in cement plant. But I think another two years, it will be too early to discuss any kind of projections on that because our whole entire focus is to make sure that not only cement plant stabilizes, our sales and everything else also stabilizes.

Analyst asked about future capacity expansion strategy, and management indicated a focus on stabilizing current operations before further additions in both segments.

Asked by Bharat Gupta

2 min read 5 chapters

Detailed narrative

FY25 Performance and Macroeconomic Headwinds

Shri Keshav Cements & Infra Ltd. reported a stable total income of ₹124.6 crores for FY25, with an EBITDA of ₹25.17 crores, resulting in a healthy margin of 20.73%. This performance was achieved despite significant macroeconomic and sectoral headwinds, including a decrease in net realization by approximately ₹425 compared to FY24. In Q4 FY25, cement prices reduced by 11.5% and renewable prices by 12%, with naked realization around ₹3,350.

Capacity Expansion and Stabilization

The company successfully commissioned its new kiln in March 2025, expanding its cement manufacturing capacity to 1 million tons per annum. This expansion is expected to unlock scale benefits and optimize energy consumption. Management indicated that the plant is stabilizing and has reached 77% of its rated capacity, with full rated capacity expected by the end of the current quarter. The company aims for 50% overall capacity utilization throughout FY26.

Solar Power Strategy and Expansion

Shri Keshav Cements added 3 Megawatt of renewable power in FY25, bringing its total capacity to 40 Megawatt. The company plans to add another 30 Megawatt in FY26, with a project cost estimated between ₹130-135 crores, to be funded through bank loans. Long-term plans include increasing renewable power capacity beyond 100 Megawatt within the next three to five years. The focus is on increasing captive consumption, which is projected to rise from 40-45% to 60-65% with the current 40 MW capacity, and up to 95% once 80-85% cement capacity utilization is achieved.

Financial Outlook and Debt Management

For FY26, the company projects an EBITDA of over ₹70 crores and a Profit Before Tax (PBT) of ₹30-35 crores, with a positive PAT expected. The tax rate is anticipated to be around 15-16% for the next couple of years due to carry-forward depreciation losses. Interest expenses are estimated at ₹25 crores, and depreciation at ₹18-20 crores for FY26. The company repaid approximately ₹26 crores of debt in FY25, and despite new capex, long-term borrowings only increased by ₹4 crores, maintaining a debt-to-equity ratio of less than 2.

Market Penetration and Digital Initiatives

The company is actively pursuing increased market penetration, especially with its expanded 1 million TPA capacity, which qualifies it for government-related projects. Initiatives include strengthening sales and marketing teams and leveraging digital analytics for customer engagement and incentives. The company is also exploring expansion into new geographies like Pune, Bangalore, and Kerala, and considering entry into the Ready-Mix Concrete (RMC) segment to enhance margins and reach end customers.

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

More Construction Materials earnings calls