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    Shri Keshav

    530977
    Construction Materials·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

    7

    • 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

    1

    • Decline in net realization for cement and renewable power

    Key financials

    Single quarter

    03 metrics
    1. 01Total Income₹124.6 Cr
    2. 02EBITDA₹25.17 Cr
    3. 03EBITDA Margin20.7%

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹130 crores

    approaching the bank and getting that funded through a nationalized bank only.

    Debt

    1.2x EBITDA

    Guidance & targets

    11
    CategoryTargetPriority
    Profitability
    EBITDA
    ₹70 crores plus
    		Medium
    Profitability
    PBT
    ₹30 to 35 crores
    		Medium
    Profitability
    Positive PAT
    Positive
    		High
    Capacity
    Cement Capacity
    1 million tons
    		High
    Capacity
    Solar Power Capacity
    30 Megawatt additional
    		Medium
    Capacity
    Solar Power Capacity
    beyond 100 Megawatt
    		Medium
    Capacity Utilization
    Overall Capacity Utilization
    50%
    		High
    Tax
    MAT Rate
    15% to 16%
    		High
    Expenses
    Interest Amount
    ₹25 crores
    		Medium
    Expenses
    Depreciation Amount
    ₹18 to 20 crores
    		Medium
    Realization
    Solar Power Price
    ₹6
    		High

    Kiln Stabilization and Rated Capacity Achievement

    by the end of this quarter
    CurrentReached 77% of rated capacity
    TargetRated 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.

    How to verify

    guidance_and_targets[metric='Overall Capacity Utilization']

    Risks & concerns

    4
    RiskSeverity

    Subdued revenue pressures due to macroeconomic and sectoral headwinds

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

    medium

    Decline in net realization for cement and renewable power

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

    high

    Impact of early monsoons on dispatches

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

    medium

    Regulatory framework for selling renewable power

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

    medium

    Q&A highlights

    8

    “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

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.