Shree Cement Limited — Q4 FY26 earnings call

Call held 6 May 2026

Management summary

Shree Cement delivered a strong Q4 FY26 with significant sequential growth in volumes and EBITDA, driven by improved realizations and capacity utilization. The company continued its capacity expansion, commissioning 3.5 MTPA at Kodla, and announced further projects in UAE and Meghalaya. Despite geopolitical headwinds in the Middle East and rising input costs, the company maintained a focus on profitability and rewarded shareholders with a 36% increase in annual dividend.

Highlights

  • Q4 FY26 Operating EBITDA increased 34% from INR 902 crores to INR 1,212 crores.

  • Q4 FY26 total volume (cement + clinker) grew 9.45% QoQ from 9.84 million tons to 10.77 million tons.

  • FY26 total dividend increased 36% YoY from INR 110 per share to INR 150 per share.

  • Commissioned 3.5 million tons cement capacity at Kodla, Karnataka, raising India's total capacity to 69.3 million tons.

  • FY26 EBITDA per ton stood at INR 1,161, an 8.5% increase from INR 1,071 last year.

Concerns

  • Sales slowdown in Union Cement (UAE) due to the geopolitical conflict in the Middle East.

  • Forecast of moderate monsoon conditions may act as a headwind for the sector.

  • Expected 10-12% increase in fuel cost per kilocalorie in Q1 FY27, from INR 1.60 to INR 1.76-1.80.

  • A 'little slowdown' in demand observed after April 15th.

Key financials

2 periods

Q4

  • Domestic Cement Volume
    10.56 million tons
    YoY +11% QoQ +24.5%
  • Total Volume
    10.77 million tons
    YoY +9.4% QoQ +9.4%
  • Realization
    ₹4,725/ton
    QoQ +1.6%
  • Operating EBITDA
    ₹1,212 Cr
    QoQ +34.4%
  • EBITDA/ton
    ₹1,125/ton
    QoQ +9%

FY26

  • Total Sales Volume
    36.4 million tons
    YoY +2.2%
  • Operating EBITDA (excl. one-time)
    ₹4,222 Cr
    YoY +11%
  • EBITDA/ton
    ₹1,161/ton
    YoY +8.5%

What they filed

Q1 FY27: revenue up 13.6%, net profit down 29.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,727 4,235 5,240 4,948 4,303 +15%4,416 +4%5,643 +8%5,623 +14%
EBITDA593 947 1,381 1,229 851 +44%861 −9%1,250 −9%1,074 −13%
Net profit93 229 556 619 277 +198%279 +22%532 −4%438 −29%
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.

Segment breakdown

SegmentFY26 RevenueQ4 Revenue
Union Cement (UAE)870 million aed247 million aed
RMC Business246 million aed90 million aed

Capital allocation

high confidence
  • Capex ₹1,500 Cr Entirely through internal accruals
    • Increasing RMC plants
    • Working on railway sidings
    • Meghalaya expansion (long-term project cost) ₹1,800 Cr
    Ashok Bhandari: "We have generally funded all our capex to our internal accruals and we intend to do the same." and "total capex estimation for the year '26-'27 is approximately INR1,500 crores"
  • Debt Gross ₹1,500 Cr · Net ₹6,400 Cr
    Ashok Bhandari: "We are 6400 Cr Net cash and a borrowing of approx 1500 Cr, Gross 7900 Cr."
  • Dividend ₹70/share (final)
    Neeraj Akhoury: "final dividend of INR70 per share in addition to the interim dividend of INR80 per share for the year '25-'26 declared in October '25. Total dividend for the year stands at INR150 per share, representing a 36% increase over the INR110 per share dividend paid in '24-'25."
  • Liquidity Cash ₹7,900 Cr Strong cash position, with gross cash of INR 7,900 crores and net cash of INR 6,400 crores.
    Ashok Bhandari: "We are 6400 Cr Net cash and a borrowing of approx 1500 Cr, Gross 7900 Cr."

Guidance & targets

Capex

  • FY27 Capex Capex · FY27 · High confidence INR 1,500 crores
    Ashok Bhandari: "the total capex estimation for the year '26-'27 is approximately INR1,500 crores"

    — Ashok Bhandari

Capacity

  • RMC Plants Count Capacity · FY27 end · High confidence 50-55 plants
    Ashok Bhandari: "We expect to close the year with about 50 to 55 RMC plants"

    — Ashok Bhandari

  • Total Cement Capacity Capacity · by 2029 · Medium confidence 80 million tons
    Ashok Bhandari: "We are on record saying that we should reach 80 million tons by 2029."

    — Ashok Bhandari

  • Union Cement UAE Mill Commissioning Capacity · September '26 · High confidence 2.5 million tons cement mill
    Neeraj Akhoury: "cement mill of 2.5 million tons in Union Cement, UAE is progressing well and is scheduled to be commissioned by September '26."

    — Neeraj Akhoury

  • Meghalaya Plant Capacity Capacity · Ongoing · High confidence 0.95 million tons clinker and 0.99 million tons cement
    Neeraj Akhoury: "setting up an integrated cement plant with clinker capacity of 0.95 million tons and cement capacity of 0.99 million tons in the state of Meghalaya."

    — Neeraj Akhoury

  • RMC Plant Count Capacity · start of FY27 · High confidence 36 plants
    Neeraj Akhoury: "the total RMC plant count will increase to 36 plants, significantly strengthening the company's operational footprint at the start of financial year '27."

    — Neeraj Akhoury

Cost

  • Lead Distance Cost · subsequent quarters · Medium confidence sub 440 kilometer ton

    From 457 kilometers today

    Ashok Bhandari: "working towards reducing this and maybe bring it back to sub 440 kilometer ton."

    — Ashok Bhandari

  • FY27 Depreciation Cost · FY27 · High confidence INR 1,600 crores to INR 1,700 crores
    Ashok Bhandari: "Yes, we are sticking to that." (referring to INR1,600-1,700 crores depreciation guidance for FY27)

    — Ashok Bhandari

  • Fuel Cost per Kilocalorie Cost · Q1 FY27 · High confidence INR 1.76-1.80

    From INR 1.60 today

    Ashok Bhandari: "fuel cost which is standing at about INR1.60 per kilocalorie as on date will move up maybe by 10% or something for this quarter."

    — Ashok Bhandari

  • Packing Cost Increase Cost · going forward · High confidence INR 100 per ton
    K.K. Jain: "And now going forward, it would be around, say, INR100 per ton, there will be an increase."

    — K.K. Jain

  • Total Cost Increase (Q2 FY27 vs Q4 FY26) Cost · Q2 FY27 · High confidence INR 150-200 per ton
    K.K. Jain: "Should be around, say, INR150 to INR200 per ton, including packing and the raw material cost as well as this power fuel and all."

    — K.K. Jain

  • Total Cost Increase (Q1 FY27 vs Q4 FY26) Cost · Q1 FY27 · High confidence INR 20-30 per ton
    K.K. Jain: "in the fourth quarter the impact is around, INR20 to INR30 compared to December."

    — K.K. Jain

Volume

  • FY27 Volume (Cement + Clinker) Volume · FY27 · Medium confidence around 40 million tons
    Ashok Bhandari: "we expect to reach about 40 million tons in this year. '26-'27, we should be around 40 million tons."

    — Ashok Bhandari

  • Company Volume Growth Volume · FY27 · Medium confidence 8% to 8.5%
    Ashok Bhandari: "We should grow at about 8% to 8.5%"

    — Ashok Bhandari

Market Growth

  • Cement Demand Growth (India) Market Growth · FY27 · High confidence 7.1%-7.2%
    Ashok Bhandari: "So we should do about 7.1%-7.2% cement demand growth rate."

    — Ashok Bhandari

What to watch in Q1 FY27

Consolidated Financial Reporting

Next quarter onwards
Current Standalone + segment details
Target Consolidated financials

Why it matters

Provides a holistic view of the company's performance including all subsidiaries, which management indicated might be introduced next quarter.

Ashok Bhandari: "Indeed, I take your point. And we have been looking at this possibility. Maybe next quarter onwards, we will talk of consol only."

Risks & concerns

  • Rising Input Costs

    high

    Fuel cost per kilocalorie is expected to increase by 10-12% in Q1 FY27, and packing costs by INR 100/ton going forward, with a total cost increase of INR 150-200/ton in Q2 FY27.

    Both acknowledged

  • Middle East Geopolitical Conflict

    medium

    Tension in the Middle East has slowed sales for Union Cement (UAE), though recovery is expected with ceasefire.

    Management acknowledged

  • Moderate Monsoon Conditions

    medium

    Forecasted moderate monsoon conditions may act as a headwind for the cement sector's growth momentum.

    Management acknowledged

  • Recent Demand Slowdown

    medium

    A 'little slowdown' in demand has been observed after April 15th, indicating potential short-term market softness.

    Both acknowledged

Q&A highlights

7 direct
Cash Surplus and Capital Allocation Strategy Direct
Ashok Bhandari: "We are 6400 Cr Net cash and a borrowing of approx 1500 Cr, Gross 7900 Cr. You are correct. We will keep on finding the ways to reward the shareholders as well as if the situation improves, we can expedite our capital expenditure program by front-ending it. You will appreciate that in the last 15 years or so, we have not borrowed. We have generally funded all our capex to our internal accruals and we intend to do the same.

Clarifies the company's strong net cash position and its strategy to fund capex through internal accruals while also looking to reward shareholders.

Asked by Rajesh Ravi

Volume vs. Value Strategy Shift Direct
Ashok Bhandari: "Q2 and Q3 of last financial year, we suffered to pull up our prices. We did not aggressively sell. And once the prices have established to a level where the delta between the top players and us has reduced significantly, we don't intend to give up that advantage. We would like to have now our fair and proper market share. Profitability is the prime focus.

Explains the company's nuanced approach to market share and pricing, emphasizing that profitability remains the core focus after achieving stable pricing.

Asked by Pinakin

Meghalaya Project Incentives Partial
Neeraj Akhoury: "No, we have not yet received any confirmed paper document from the government of Meghalaya on incentives to be given. We have approached them, but we have not got any confirmation from that. So this project is to our estimate, strongly viable even without incentives.

Highlights that while the Meghalaya expansion is viable, the company is still awaiting formal confirmation on potential government incentives, which could further enhance project economics.

Asked by Ritesh Shah

Cost Inflation and Price Pass-through Direct
Ashok Bhandari: "Till now what the price increase has been done that is anticipated cost increase up to June. Did you understand it? But cost is dynamic and pricing situation is dynamic and demand is also dynamic and demand affects pricing. So that is not much. In today's date yes we are generally covered. If adverse movement will happen we will tell you in the next quarter.

Addresses concerns about rising fuel and packing costs, indicating that current price hikes cover costs up to June, but acknowledges the dynamic nature of costs and pricing, implying ongoing vigilance.

Asked by Siddharth Mehrotra, Rajesh Ravi

Fuel Inventory and Cost Impact Timing Direct
Ashok Bhandari: "The charge is on weighted average cost, not on procurement cost or historical cost. The weighted average cost with every shipment keeps on increasing as the fuel price is rising. So yes, the major impact will come in the third month. But then every month, you will have some incremental effect.

Provides clarity on how rising fuel costs impact the P&L, explaining the lag effect due to weighted average cost accounting and the company's higher inventory levels (over 90 days).

Asked by Pulkit Patni

RMC Business Growth and Reporting Direct
Neeraj Akhoury: "RMC is at a very nascent stage. It just started. We are a very new 26 plant company now going to 36. I think we will take a few more quarters and maybe some years before we are able to report RMC independently as a business line.

Outlines the early stage and growth trajectory of the RMC business, indicating its future potential as a separate reporting segment but acknowledging it will take time.

Asked by Prateek Kumar

Demand Slowdown in April/May Direct
Ashok Bhandari: "Till 15th April everything was all right. After that little slowdown has come. Now let's see now it's only 6th May what you are talking.

Reveals a recent softening in demand post-April 15th, suggesting a potential short-term headwind for the current quarter.

Asked by Rajesh Ravi

North Region Market Share Strategy Direct
Ashok Bhandari: "No, I said that we sacrificed volumes to reach a price point. And once we reach that price point and it became acceptable to all, we sold as much as we could sell. So we are not chasing volume. Before we were not chasing volume because we have to increase our price point.

Reiterates the company's strategic decision to prioritize pricing stability before pursuing market share, clarifying that current volume growth is a result of achieving that stable price point.

Asked by Navin Sahadeo

3 min read 8 chapters

Detailed narrative

Strong Q4 FY26 Performance and FY26 Overview

Shree Cement reported a robust Q4 FY26, with domestic cement sales volume increasing by 24.5% QoQ to 10.56 million tons and total volume (cement + clinker) growing 9.45% QoQ to 10.77 million tons. Operating EBITDA saw a significant 34.36% QoQ increase, reaching INR 1,212 crores, with EBITDA per ton improving to INR 1,125. For the full year FY26, total sales volume grew 2.2% to 36.4 million tons, and operating EBITDA (excluding one-time impact) increased 11% to INR 4,222 crores, with EBITDA per ton at INR 1,161.

Capacity Expansion and Project Updates

The company commissioned an integrated project of 3.65 million tons clinker and 3.5 million tons cement capacity at Kodla, Karnataka, increasing its installed cement production capacity in India to 69.3 million tons. Further expansion includes a 2.5 million tons cement mill in Union Cement, UAE, scheduled for commissioning by September '26, and a new integrated plant in Meghalaya with 0.95 million tons clinker and 0.99 million tons cement capacity. The total capex for FY27 is estimated at INR 1,500 crores, primarily for RMC plants, railway sidings, and the Meghalaya project.

Union Cement (UAE) Performance and Middle East Impact

Union Cement in UAE demonstrated strong performance, with FY26 sales volume up 18% to 45.65 lakh tons and revenue growing 39% to AED 870 million. Q4 FY26 also saw healthy growth, with volume up 9% QoQ to 11.65 lakh tons and revenue up 18% QoQ to AED 247 million. However, sales have slowed in the last two months due to geopolitical tensions in the Middle East, though a recovery is anticipated with a ceasefire.

Cost Management and Fuel Price Dynamics

The company's landed cost per kilocalorie was INR 1.60 in Q4 FY26, but it is expected to increase by 10-12% in Q1 FY27, reaching INR 1.76-1.80. Packing costs are also projected to rise by INR 100 per ton going forward. Management noted that while coal is becoming cheaper than pet coke, pet coke prices have also cooled. The company maintains over 90 days of fuel inventory, and costs are charged on a weighted average basis, leading to a gradual impact of rising prices.

Capital Allocation and Shareholder Returns

Shree Cement maintains a strong financial position with INR 6,400 crores in net cash and INR 1,500 crores in gross borrowings as of March '26. The company's strategy is to fund all capex through internal accruals. For FY26, the Board recommended a final dividend of INR 70 per share, bringing the total annual dividend to INR 150 per share, a 36% increase over FY25's INR 110 per share.

RMC Business Expansion and Outlook

The Ready-Mix Concrete (RMC) business is rapidly expanding, with 26 operational plants at the end of FY26 and 10 new plants inaugurated in March '26, bringing the total to 36 plants by the start of FY27. For Q4 FY26, RMC revenue was INR 90 crores with a volume of 1.99 lakh MQ, and full-year FY26 revenue stood at INR 246 crores. Management views RMC as a nascent business that will take several quarters to years to report independently.

Sustainability Initiatives and Green Power

The company continues its focus on sustainability, with green electricity accounting for 61% of total electricity consumption in Q4 FY26, up from 59% in Q4 FY25. Its green power generation capacity stands at 666.5 megawatts. Shree Cement also achieved a water positivity index of more than 8x in FY26 and maintains zero liquid discharge across all manufacturing locations.

Market Outlook and Pricing Strategy

Management expects India's GDP growth to be 6.5% in FY27, translating to a cement demand growth of 7.1-7.2%, with the company targeting 8-8.5% growth. After achieving a stable pricing platform and narrowing the gap with top players by INR 15-20 per bag, the company is now focused on gaining fair market share while maintaining profitability. Price hikes of approximately INR 25 per bag were implemented recently.

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