HeidelbergCement India Limited — Q4 FY25 earnings call

Call held 29 May 2025

Management summary

Heidelberg Cement India reported a strong Q4 FY25 with PAT of Rs. 504 million and flat EBITDA per ton, despite a challenging full year where EBITDA per ton declined by 20% due to price pressure and kiln shutdown for upgrades. The company is focused on green initiatives, increasing non-grid power to 45% and alternate fuel usage to 8%. Capacity debottlenecking is underway, expected to add 200,000 tons of cement annually, and the company maintains a robust financial position with net cash exceeding debt.

Highlights

  • Q4 FY25 Profit After Tax (PAT) stood at Rs. 504 million, a significant increase over the previous quarter.

  • Q4 FY25 EBITDA per ton was flat at Rs. 722, compared to Rs. 721 in Q4 FY24.

  • Full Year FY25 EBITDA per ton decreased by 20% YoY to Rs. 530, from Rs. 659 in FY24.

  • The Board recommended a dividend of Rs. 7 per share for FY25.

  • Non-grid power share increased to 45% of total power consumed, with pure green power at 38%.

  • Clinker debottlenecking project, expected to be completed by June 2025, will add 200,000 tons of cement and 130,000 tons of clinker annually.

  • The company maintains a healthy balance sheet with net cash of Rs. 3,849 million, exceeding debt of Rs. 687 million.

  • Alternate fuel usage increased to 8% in FY25, with a target to reach 10% in FY26.

Concerns

  • Intensified competition from new capacity in operating regions

  • Pricing pressure due to competition

Key financials

3 periods

Headline

  • PAT
    ₹50.4 Cr
  • Net Cash
    ₹384.9 Cr
  • Debt
    ₹68.7 Cr

Q4 FY25

  • EBITDA/ton
    ₹722
    YoY +0.14%

FY25

  • EBITDA/ton
    ₹530
    YoY -19.6%
  • Clinker Production
    2.7 million tons
    YoY -10%

What they filed

Q1 FY27: revenue up 5.0%, net profit down 35.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue461 543 612 598 512 +11%574 +6%646 +6%628 +5%
EBITDA37 33 91 89 58 +57%53 +61%88 −3%67 −25%
Net profit11 5 50 48 25 +127%16 +220%45 −10%31 −35%
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.

Guidance & targets

Capacity

  • Additional Cement Capacity from Debottlenecking Capacity · per year · High confidence 200,000 tons
    This will lead to 200,000 tons of extra cement in a year in 12 months.

    — Management

  • Additional Clinker Capacity from Debottlenecking Capacity · per year · High confidence 130,000 tons
    130,000 tons of clinker will increase.

    — Management

  • Debottlenecking Project Completion Capacity · by June 2025 · High confidence June 2025
    This project is right under its way and expected to be completely over by June.

    — Management

  • New Clinker Plant Size (Central India) Capacity · future · Low confidence 2-3.5 million tons
    But any modern clinker plant could be anywhere between 2 million to 3 million, 3.5 million tons.

    — Management

  • Heidelberg Group Gulbarga Clinker Expansion Capacity · underway · High confidence 2 million tons
    the group has invested in a 2 million tons clinker expansion at Gulbarga. And that project is well underway right now.

    — Management

Volume

  • Company Sales Volume Growth Volume · FY26 · Medium confidence 6-7%
    I would say around 6% to 7% is definitely what we are targeting as a growth, in line with the cement with the GDP growth and overall cement growth in India.

    — Management

Other

  • Green Power Share Increase Other · FY26 · Medium confidence 2-3%
    So we expect that maybe around 2% to 3% increase in financial year 2026 because we have recently entered into this 5.5 megawatts further green power, and that benefit will come in the financial year 2026.

    — Management

  • Time to Build Project Post EC Other · post EC · Medium confidence 26-30 months
    post EC normally takes anywhere between 26 to 30 months to build a project.

    — Management

  • Heidelberg Group Restructuring Timeline Other · from now · Medium confidence at least 24 months
    I think by the time it is over, it should be at least 24 months from now, but the process is already on.

    — Management

  • Alternate Fuel Usage (AFR) Other · this year (FY26) · Medium confidence 10%
    So we should be ending this year at about 10%.

    — Management

  • Premium Products Share Other · this year (FY26) · Medium confidence 47%
    Can go up to 47% this year.

    — Management

Capex

  • Annual CAPEX Capex · FY26 · Medium confidence Rs. 60 crores
    On the CAPEX side, actually annual CAPEX for the financial year 2026 we estimated around Rs. 60 crores, which includes a little bit on account of debottlenecking because most of the debottlenecking CAPEX already we did in by March 2025, part amount will come in the financial 2026.

    — Management

Headcount

  • Employee Cost Headcount · FY26 · Medium confidence slightly lower than Rs. 170 crores
    It is slightly lower than that [Rs. 170 crores].

    — Management

Dividend

  • Dividend Payout Ratio Dividend · future · Medium confidence 70-90%
    But if you look at it, roughly, we have been navigating between 70% to 90% levels over the last three to four years. So you can expect that it will remain in the same range unless and until there is a very, very significant requirement of cash for expansions.

    — Management

Risks & concerns

  • Intensified competition from new capacity in operating regions

    high

    New projects by Sri Cement (Etah) and Ultratech (Katti) near operating areas could intensify competition.

    Management acknowledged

  • Pricing pressure due to competition

    high

    Premiums over other players have come down, leading to diluted pricing in the market.

    Management acknowledged

  • Geopolitical uncertainty and global economic slowdown

    medium

    Ongoing global conflicts and a global economic slowdown could create volatility and impact India's exports and investment inflows.

    Management acknowledged

  • Demand seasonality and unseasonal events

    medium

    Exceptional year with elections, followed by severe monsoon, and unseasonal rains impacted volumes in FY25, and demand remains muted in Q1 FY26.

    Management acknowledged

  • Lack of government sops for new projects

    medium

    New plants by competitors often benefit from government sops (Rs. 500-600 per ton) which Heidelberg Cement India does not currently have for new investments.

    Management acknowledged

Areas of evasion (3)

  • Exact timeline for Gujarat environmental clearance
  • Specific future pricing impact from competition
  • Potential increase in OPC cement share

Q&A highlights

2 direct
Progress on expansions and clinker/cement debottlenecking for FY25 Direct
I just commented, this is why our main kiln was shut down. This project is right under its way and expected to be completely over by June. This will lead to 200,000 tons of extra cement in a year in 12 months. It's a clinker debottlenecking which shall result in additional 200,000 tons of PPC cement in 12 months. 130,000 tons of clinker will increase.

Clarifies the status and impact of the ongoing debottlenecking project, providing specific capacity additions and completion timeline.

Asked by Rajesh Ravi

Impact of intensified competition on pricing and volume growth outlook for FY26 Partial
No, we are currently running at a net sales realization which is about Rs. 100 up from the average of Q1. But what will be the impact of these expansions, that's crystal ball gazing. I would not like to make a comment on that. It will all depend on how quickly the competition decides to ramp up and how is the demand supply situation. Fundamentally, how is the demand driven by government policies and the rural demand, etc. So hazarding our guess on what will be the impact on pricing in the market is not something that we are in a position to do. ... But the guidance would be anywhere between 6% to 7%.

Highlights current price improvement but management's reluctance to predict future pricing impact due to competition, while still providing a volume growth guidance.

Asked by Rajesh Ravi

Fuel cost trends and green power strategy Direct
Our total clinker in the 2025 Fiscal Year is 2.7 million tons and last year was 3 million tons. ... Actually we used three type of the fuel, pet coke, coal and the alternative fuel. So pet coke prices started with the higher prices in the fiscal year, then start reducing, and thereafter end of the year that start again hardening in the market. So that's why our last quarter the fuel was slightly higher.

Provides specific clinker production figures and a detailed explanation of fuel cost dynamics, which is a critical component of cement production costs.

Asked by Rajesh Ravi

2 min read 5 chapters

Detailed narrative

Q4 FY25 Performance and Full Year Overview

Heidelberg Cement India reported a strong Q4 FY25 with Profit After Tax (PAT) reaching Rs. 504 million, a significant improvement over the previous quarter. The EBITDA per ton for Q4 FY25 remained flat at Rs. 722, consistent with Rs. 721 in Q4 FY24. However, the full fiscal year FY25 saw a 20% year-on-year decline in EBITDA per ton to Rs. 530, primarily attributed to price decreases and a one-month shutdown of the main kiln for upgrades. The company's board has recommended a dividend of Rs. 7 per share for FY25.

Capacity Expansion and Debottlenecking Initiatives

The company is actively pursuing capacity enhancements. A clinker debottlenecking project, expected to be completed by June 2025, will add 200,000 tons of cement and 130,000 tons of clinker annually. For future growth, Heidelberg Cement India has acquired new mines in Central India (MP) and is studying ideal project sites for a new clinker plant, potentially ranging from 2 to 3.5 million tons. Environmental clearance for a Gujarat expansion is also in progress, with management noting that building a project post-EC typically takes 26-30 months.

Cost Management and Green Energy Transition

Heidelberg Cement India continues its focus on cost optimization and sustainability. The company's non-grid power share increased to 45% in FY25, with pure green power accounting for 38% of this. A long-term wind-solar hybrid PPA for 5.5 megawatts was signed, contributing to a 2-3% expected increase in green power share in FY26. Alternate fuel usage reached 8% in FY25, with a target to increase to 10% in FY26. The average KCal cost for FY25 was Rs. 1.75 per KCal, with power consumption at 72.6 per ton of cement.

Market Dynamics and Competitive Landscape

The Indian cement demand is expected to remain robust, driven by GDP growth forecasts of 6.3-6.8%, rebound in private consumption, and capital expenditure. However, the company acknowledges intensified competition in its operating regions due to new capacity additions by players like Sri Cement and Ultratech. This has led to pricing pressure, with premiums over competitors narrowing. Management noted current net sales realization is up by Rs. 100 from the Q1 average but refrained from predicting future pricing impacts.

Financial Health and Capital Allocation

The company maintains a strong financial position, with net cash of Rs. 3,849 million significantly exceeding its debt of Rs. 687 million. This healthy balance sheet provides ample flexibility for future investments. The planned annual CAPEX for FY26 is estimated at Rs. 60 crores, primarily for replacement and the remaining debottlenecking work. Management indicated a consistent dividend payout policy, typically ranging between 70-90% of face value, which is expected to continue unless significant cash is required for large-scale expansions.

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