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    Shree Cement Limited

    SHREECEM
    Construction Materials·14 May 2025
    Management Summary

    Shree Cement delivered a strong Q4 FY25, driven by a 13% sequential volume growth to 9.84 million tons and a 29% sequential increase in EBITDA per ton to INR 1,406. The company's strategy to prioritize profitability over volume, coupled with an increased focus on premium products and green energy adoption, contributed to improved realizations and margins. Strategic capacity expansions are underway, with new grinding units commissioned and further projects planned, despite current subdued capacity utilization.

    Highlights

    5

    • Total India sales volume increased to 9.84 million tons in Q4, up approximately 13% sequentially from 8.67 million tons.

    • Average realization per ton improved by about 5% sequentially to INR 4,768 from INR 4,554.

    • EBITDA for the quarter was INR 1,383 crores, representing a sequential growth of 47%.

    • EBITDA per ton increased by 29% sequentially to INR 1,406 from INR 1,088.

    • The share of green power in total electricity consumption stood at about 60.2% in Q4 FY25, one of the highest in the Indian cement industry.

    Concerns

    3

    • Volume growth remains in low single digits, lagging the general industry trend of high single-digit growth.

    • Demand in April and early May was not as robust as expected, partially attributed to 'the war'.

    • Capacity utilization remains subdued at 72% company-wide in Q4 FY25, with South India at 51%.

    What Changed1

    vs Q2 FY26

    Guidance items9 → 8 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01Total Sales Volume9.84 MT+13%QoQ
    2. 02Average Realization/ton₹4,768+5%QoQ
    3. 03EBITDA₹1,383 Cr+47%QoQ
    4. 04EBITDA/ton₹1,406+29.0%QoQ
    5. 05Clinker Capacity Utilization73%

    Segment breakdown

    North India
    74% Capacity Utilization
    East India
    79% Capacity Utilization
    South India
    51% Capacity Utilization
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹3,000 crores

    Debt

    Net ₹-5,400 crores

    Liquidity

    Liquidity disclosed

    Company has net cash of INR 5,400 crores.

    Guidance & targets

    8
    CategoryTargetPriority
    Volume
    Volume Growth
    6.5% to 7.5%
    		High
    Volume
    Total Sales Volume
    39 million tons
    		Medium
    Capacity
    Total Capacity
    More than 80 million tons
    		High
    Green Energy
    Share of Green Energy
    Increase further
    		Medium
    Cement Demand
    Cement Demand Growth
    6.5% to 7.5%
    		High
    Capacity Utilization
    Capacity Utilization
    75%-85%
    		Medium
    Depreciation
    Depreciation
    INR 3,000 crores to INR 3,200 crores
    		High
    RMC
    Number of RMC Units
    at least 50-odd RMC units
    		Medium

    Volume Growth (FY26)

    next quarter (Q1 FY26 results)
    CurrentQ4 FY25 volume 9.84 million tons
    Target6.5-7.5% growth for FY26, or ~39 million tons for FY26

    Why it matters

    This is a key indicator of demand and the company's ability to achieve its stated volume targets for the fiscal year.

    As far as the volumes for '25-'26 is concerned, Mr. Akhoury has clearly said that we expect 6.5% to 7.5% or 8% growth. I would be slightly more aggressive. I would like to say that we may do about 39 million tons for this year.

    How to verify

    key_financials.metrics[label='Total Sales Volume']

    Risks & concerns

    3
    RiskSeverity

    Demand Robustness

    Demand in April-early May was not as robust as expected, partly due to 'the war'. — Management acknowledged

    medium

    Capacity Overhang

    Current capacity utilization is subdued, leading to a strategy prioritizing profit over volume in a competitive market. — Management acknowledged

    medium

    Competitive Pricing Pressure

    Analyst raised concerns about pricing pressure from new capacity, but management believes prices will hold due to strong balance sheets of existing players. — Analyst downplayed

    medium

    Q&A highlights

    8

    “our strategy is not to be the biggest volume player in the industry, but be the most profitable player in the industry.”

    Management explicitly stated its core strategy to prioritize profitability over volume growth, explaining the trade-off in a capacity overhang scenario.

    asked by Amit Murarka

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q4 FY25 Performance Driven by Volume and Realization

    Shree Cement reported a robust Q4 FY25, with total India sales volume increasing by approximately 13% sequentially to 9.84 million tons from 8.67 million tons. This strong volume growth, coupled with a focus on premium products, led to a 5% sequential improvement in average realization per ton, reaching INR 4,768 from INR 4,554. Consequently, EBITDA for the quarter grew by 47% sequentially to INR 1,383 crores, with EBITDA per ton increasing by 29% to INR 1,406 from INR 1,088.

    02

    Strategic Capacity Expansion and Future Growth Outlook

    The company commissioned 6.4 million tons per annum (MTPA) of new grinding capacity in Q4 FY25, including a 3 MTPA unit in Etah (Uttar Pradesh) and a 3.4 MTPA unit in Baloda Bazar (Chhattisgarh), bringing total installed capacity to 62.8 MTPA. Further integrated cement units in Jaitaran (Rajasthan) and Kodla (Karnataka) are scheduled for commissioning by Q1 FY26 and Q2 FY26, respectively. Management aims to achieve more than 80 MTPA capacity by 2028 and expects cement demand to grow by 6.5% to 7.5% in FY26.

    03

    Commitment to Green Energy and ESG Leadership

    Shree Cement demonstrated a strong commitment to sustainability, with green electricity accounting for 60.2% of total electricity consumption in Q4 FY25, a significant increase from 480 MW at the beginning of FY25 to 582 MW by quarter-end. This includes the commissioning of a 60.3 MW solar power plant in Jodhpur in March 2025. The company also received a CareEdge-ESG 1 rating with a score of 70.8% and was recognized in the S&P Global Sustainability Yearbook '25, highlighting its leadership in managing ESG risks.

    04

    Prioritizing Profitability Over Volume in a Competitive Market

    Management reiterated its strategic focus on being the most profitable player rather than the largest by volume, acknowledging the trade-off between price and volumes in a capacity overhang scenario. This strategy is supported by enhancing premium product sales, which increased from 11.9% in Q4 2024 to 15.6% in Q4 FY25. The company is confident that this approach will improve brand equity, lift volumes, and enhance price realization going forward⏳.

    05

    Conservative Accounting and One-off Provisions

    The company adopted a more conservative accounting approach for Expected Credit Loss (ECL), now provisioning for all legal notices served, which resulted in an additional INR 24 crores provision in Q4 FY25. Additionally, a one-off📎 item of INR 30.66 crores was recorded during the quarter, related to a voluntary separation scheme for employees and contract workers. The adjusted EBITDA per ton, excluding this one-off📎 item, stood at INR 1,437.

    06

    Expansion of Ready Mix Concrete (RMC) Business

    Shree Cement is actively expanding its RMC division, which currently operates 15 plants. The company aims for rapid growth in this segment, with a long-term target of establishing at least 50 RMC units. Management noted that some RMC units, particularly in Mumbai and Hyderabad, have already achieved EBITDA positive status, indicating the potential for this new foray.

    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.