Shree Digvijay Cement Co.Ltd — Q4 FY26 earnings call

Call held 25 Mar 2026

Management summary

Shree Digvijay Cement announced the integration of Hi-Bond Cement effective March 19, 2026, through a Brand Usage, Supply and Distribution Agreement, expanding combined capacity to 5.2 MTPA. The company targets 8-10% volume growth in Q4 FY26 and 70% capacity utilization by FY27. While expecting an earnings release from Hi-Bond, management foresees a INR200/metric ton dip in overall EBITDA due to clinker sourcing and potential cost increases in Q1 FY27.

Highlights

  • Strategic integration of Hi-Bond Cement effective March 19, 2026, boosting combined installed capacity to 5.2 million tons.

  • Combined entity holds a significant market share of 9-10% in Gujarat and 16-17% in the Saurashtra region.

  • Management anticipates 8-10% volume growth for Q4 FY26 and aims for 70% capacity utilization by FY27.

  • Net debt is projected to reduce by approximately INR25 crores in the next year.

Concerns

  • EBITDA per metric ton is expected to dip by INR200 due to sourcing clinker from the market for additional volumes.

  • Anticipated cost increase in Q1 FY27 due to potential supply chain disruptions, although Q4 FY26 costs are expected to be stable.

Key financials

  1. Combined Installed Capacity 5.2 million tons
  2. Combined Annual Sales Volume 4.4 million tons
  3. Gujarat Market Share 9%
  4. Saurashtra Market Share 16%
  5. Digvijay Clinker Capacity 1.1 million tons
  6. Hi-Bond Grinding Capacity 2.2 million tons

What they filed

Q1 FY27: revenue up 72.1%, net profit down 50.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue145 187 216 196 161 +11%183 −2%208 −4%337 +72%
EBITDA8 -0 28 24 19 +140%2 +1733%25 −10%29 +23%
Net profit0 -5 18 14 10 +2458%-7 −44%8 −57%7 −50%
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 Net ₹485 Cr Cost 8.7%
    • New borrowing Additional loan taken for the Brand Usage, Supply and Distribution Agreement (BDA) transaction with Hi-Bond Cement. ₹356 Cr
    • Repayment Annual repayment of existing rupee term loan, leading to a net debt reduction of approximately INR25 crores in the next year. ₹24 Cr
    at the end of 31st March, we are expecting total net debt, total debt of about INR485 crores in the balance sheet. ... And the rate of interest what we have finalized is about 8.7%.
  • M&A Hi-Bond Cement Acquisition · Integrated

    Integration under Brand Usage, Supply and Distribution Agreement (BDA) to strengthen capabilities, expand distribution reach, and leverage Hi-Bond's low production cost due to captive power and new technology. Expected to provide an earnings release.

    Shree Digvijay Cement will purchase cement from Hi-Bond Cement for cost plus fixed margin of INR500 per metric ton. Hi-Bond is currently earning EBITDA of INR700-800 per metric ton, resulting in an expected EBITDA contribution of INR200-300 per metric ton to Shree Digvijay Cement after the fixed margin.

    Further to our intimation dated 20th March, 2026 and 25th March, 2026, about the conference call with investors and analysts and pursuant to Regulation 46 and 30 read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, we enclose herewith the transcript of the aforesaid Conference Call held on 25th March 2026 at 09:00 A.M. (IST) and the same is also available on the Company's website at https://www.digvijaycement.com/announcement/. ... Shree Digvijay Cement has signed an agreement of exclusive brand usage and distribution rights of Hi-Bond Cement along with call and put option. According to the BDA, Shree Digvijay Cement will purchase cement from Hi-Bond Cement for cost plus fixed margin of INR500 and will sell at the market price. ... So, you are expecting about INR200 to INR250 from EBITDA per ton from the Hi-Bond? Yes, INR200 to INR300.

Guidance & targets

Industry Growth

  • Cement Market Expansion Industry Growth · year-on-year · High confidence 6-7%
    I would like to mention that the cement market is expanding by 6% to 7% year-on-year.

    — Vikas Kumar

Company Growth

  • Sales Volume Growth vs. Market Company Growth · going forward · Medium confidence 150-200% of market growth
    So, definitely we will grow at least 150% or 200% from the market.

    — Vikas Kumar

Capacity Utilization

  • Combined Capacity Utilization Capacity Utilization · FY27 · High confidence 70%
    for the upcoming years, we are expecting that soon we will reach close to the 70% of the capacity utilization in FY ‘27.

    — Vikas Kumar

Volume

  • Q4 FY26 Volume Growth Volume · Q4 FY26 · High confidence 8-10%
    I think it should be about 8% to 10%, definitely.

    — Vikas Kumar

  • Next Year Volume Target Volume · next year · High confidence 3-3.5 million tons
    Yes, approximately 3 million tons to 3.5 million tons.

    — Vikas Kumar

Pricing

  • Q4 FY26 Price Increase (Gross) Pricing · Q4 FY26 · High confidence INR30-40 per bag
    if we compare from the last quarter for the quarter three FY26, so there is an increase in the price by INR30 to INR40 per bag.

    — Vikas Kumar

  • Q4 FY26 Price Increase (Net) Pricing · Q4 FY26 · High confidence INR25-30 per bag
    About INR25 per bag, INR25, INR30 per bag in average.

    — Vikas Kumar

Cost

  • Q4 FY26 Cost Increase Cost · Q4 FY26 · High confidence No increase
    So, quarter four, we are not anticipating any cost increase.

    — Vikas Kumar

  • Q1 FY27 Cost Increase Cost · Q1 FY27 · High confidence Increase anticipated
    So maybe quarter one FY '27 you will see there is an increase in the cost.

    — Vikas Kumar

Debt

  • Net Debt Reduction Debt · next year · High confidence INR25 crores
    So net debt will reduce by about INR25 crores in the next year.

    — Vikas Kumar

Profitability

  • EBITDA per ton impact from clinker sourcing Profitability · future · High confidence dip of INR200 per metric ton
    There would be a slightly dip of about INR200 per metric ton, Raj.

    — Vikas Kumar

  • EBITDA per ton from Hi-Bond Profitability · future · High confidence INR200-300 per metric ton
    So, you are expecting about INR200 to INR250 from EBITDA per ton from the Hi-Bond? Yes, INR200 to INR300.

    — Vikas Kumar

What to watch in Q1 FY27

FY27 Capacity Utilization

FY27
Current Currently 4.4 million tons sales volume on 5.2 MTPA capacity (implied ~85% for current sales, but target is for future)
Target 70% utilization for 5.2 million tons capacity

Why it matters

Achieving this utilization rate is key to leveraging the expanded capacity from the Hi-Bond integration and driving economies of scale.

for the upcoming years, we are expecting that soon we will reach close to the 70% of the capacity utilization in FY ‘27.

Risks & concerns

  • EBITDA per ton reduction due to clinker sourcing

    medium

    EBITDA per metric ton is expected to dip by INR200 due to purchasing clinker from the market for additional sales volumes.

    Management acknowledged

  • Cost increase in Q1 FY27

    medium

    Supply chain disruptions are anticipated to lead to an increase in production costs, particularly fuel and raw materials, in Q1 FY27.

    Management acknowledged

  • Uncertainty of commercial cargo handling at captive jetty

    low

    Discussions with Reliance and TPS for handling commercial cargo at the captive jetty are ongoing, but no firm deals have been confirmed yet.

    Analyst partial

Q&A highlights

5 direct
Impact on EBITDA per ton from clinker sourcing Direct
There would be a slightly dip of about INR200 per metric ton, Raj.

Quantifies the expected negative impact on profitability due to the strategy of sourcing clinker from the market for additional volumes.

Asked by Raj Shah

Commercial viability of captive jetty Partial
It would be difficult to confirm now. We are under discussion with the Reliance and other nearby parties. But things have not been confirmed so, far. We will update you maybe on this separately or later on, okay?

Highlights ongoing efforts to monetize the captive jetty for commercial cargo, but indicates uncertainty and lack of firm commitments from major potential clients like Reliance and TPS.

Asked by Raj Shah

Tenure of Mr. Singhvi (Chairman) Direct
Currently, yes, because he is appointed for five years. And previous year only we have extended him for another five years. So, definitely, he will be there.

Clarifies the stability of leadership with Mr. Singhvi's continued tenure, addressing investor concerns about changes in key personnel.

Asked by Raj Shah

Company's growth target relative to market Partial
So, definitely we will grow at least 150% or 200% from the market.

Management's ambitious growth target, though ambiguously phrased, suggests a significant outperformance expectation compared to the industry's 7-8% growth.

Asked by Ram Prasad

Hi-Bond Cement's current profitability status Direct
So, it would be difficult to disclose the numbers, but I would like to mention that YTD, so they are not in the loss. And they are earning better EBITDA, better EBITDA. Almost they are at par with the industry.

Provides reassurance that the integrated Hi-Bond entity is profitable and performing at industry par, despite initial analyst concerns about potential losses.

Asked by Sreekanthreddy

Gross vs. Net price increase in Q4 FY26 Direct
This is a gross price increase, yes. This is the billing, this is the billing price. ... About INR25 per bag, INR25, INR30 per bag in average.

Clarifies the actual price realization for the company, distinguishing between the gross increase and the net increase after discounts or other adjustments.

Asked by Raghav Maheshwari

Plans for merging Hi-Bond Cement with Shree Digvijay Cement Partial
So, as explained by Sureshji, so there are a few milestones. So when we are close to that, we are completing the condition precedent and milestones, definitely we will take the option to opt the call option. But currently, there is no plan as such for merger.

Indicates that while a call option exists for full acquisition, a formal merger is not immediately planned, suggesting a phased approach to integration.

Asked by Anuj Jain

EBITDA per ton expected from Hi-Bond after fixed margin Direct
So, you are expecting about INR200 to INR250 from EBITDA per ton from the Hi-Bond? Yes, INR200 to INR300.

Quantifies the expected profitability contribution from the Hi-Bond integration, providing a clear financial benefit of the BDA.

Asked by Ram Prasad

2 min read 6 chapters

Detailed narrative

Hi-Bond Cement Integration and Capacity Expansion

Shree Digvijay Cement has successfully integrated Hi-Bond Cement effective March 19, 2026, through a Brand Usage, Supply and Distribution Agreement (BDA). This strategic move has increased the combined installed capacity to 5.2 million tons per annum, making the entity the third largest in Gujarat after UltraTech and Adani. The BDA includes a call and put option, allowing Shree Digvijay Cement to purchase cement from Hi-Bond at a cost plus fixed margin of INR500 per metric ton, with an expected EBITDA contribution of INR200-300 per metric ton from Hi-Bond.

Market Share and Regional Focus

The combined entity now commands a significant market presence, holding 9-10% of the total market share in Gujarat and 16-17% in the Saurashtra region, which is their primary market. Management highlighted that the cement market is expanding by 6-7% year-on-year, with demand in Gujarat's 32 million ton market growing by 8-10% monthly. The company aims to grow its sales volume at 150-200% of the market growth rate.

Operational Outlook and Utilization Targets

For Q4 FY26, the company anticipates an 8-10% year-on-year volume growth. Looking ahead, Shree Digvijay Cement targets achieving 70% capacity utilization for its combined 5.2 million tons capacity by FY27. The company also projects a sales volume of 3-3.5 million tons for the next year. The newly commissioned 1.5 million ton grinding unit in October 2025 is expected to contribute to this growth.

Pricing and Cost Dynamics

Management noted a gross price increase of INR30-40 per bag in Q4 FY26 compared to Q3 FY26, with a net price increase averaging INR25-30 per bag. While no cost increase is anticipated for Q4 FY26, the company expects an increase in costs during Q1 FY27 due to potential supply chain disruptions impacting fuel and raw material prices. However, the focus on blended cement (PPC, composite, slag) is expected to help mitigate margin impact from clinker sourcing.

Debt Profile and Capital Structure

As of March 31, 2026, the company expects its total net debt to be approximately INR485 crores. This includes an existing rupee term loan of INR132 crores for grinding unit expansion and an additional INR356 crores loan for the Hi-Bond BDA transaction. The finalized cost of debt is 8.7%. The company plans to reduce its net debt by approximately INR25 crores in the next year through annual repayments of INR24 crores on its existing term loan.

Strategic Advantages and Future Plans

The company benefits from locational advantages with proximity to power plants for fly ash sourcing and a captive jetty capable of handling 2-2.5 million tons of cargo. While discussions are ongoing with Reliance and TPS for commercial cargo handling at the jetty, no firm deals have been secured. Shree Digvijay Cement also has 25 million tons of clear limestone reserves and recently acquired two new mines with 20 million tons of reserves, ensuring raw material security.

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