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Informist, Wednesday, May 14, 2025

By Arya S. Biju

MUMBAI – Shree Cement Ltd.'s net profit for the March quarter declined on year despite the company reporting its highest revenue since the December quarter of 2014, as the rise in expenses and tax was more than the increase in revenue. Analysts had expected the company to report an on-year decline in its net profit for the quarter due to competitive pricing pressure despite the softening in input costs. 

Though the cement manufacturer's net profit for the quarter fell nearly 16% on year to INR 5.56 billion, it managed to beat analysts' estimate of INR 5.17 billion. The latest quarter marks the fourth consecutive quarter of on-year decline in the company's net profit. Its revenue for the quarter rose over 3% on year to INR 52.40 billion, beating analysts' estimate of INR 50.44 billion. Sequentially, the company's net profit for the reporting quarter more than doubled and revenue rose nearly 24%. The company reported a year-on-year growth in sales in the latest quarter after three consecutive quarters of decline.

Shares of Shree Cement, which initially rose after the announcement of the March quarter results, fell 0.6% and closed at INR 30,620 on the National Stock Exchange. The shares closed 1.6% higher than the previous close. Along with the earnings, the company announced a final dividend of INR 60 per share for FY25.  

For the financial year ended Mar. 31, the company reported a net profit of INR 11.96 billion, down over 51% on year. Its revenue for the year fell over 7% on year to INR 180.37 billion. The company remains optimistic about improved demand for cement in 2025-26 (Apr-Mar) and will, therefore, continue to drive its strategic initiatives including premiumisation, geographical-mix and cost optimisation, Managing Director Neeraj Akhoury said in a press release.  

The company's total expenditure for the reporting quarter rose nearly 5% on year to INR 46.48 billion, driven by a near 11% on-year rise in freight and forwarding expenses to INR 11.56 billion and a near 19% on-year rise in depreciation and amortisation expenses to INR 7.47 billion. The freight and forwarding expenses accounted for 25% of the company's total expenses in the reporting quarter, while depreciation and amortisation expenses accounted for over 16%. The company also saw a 69% on-year rise in its tax expense in the latest quarter to INR 1.87 billion. On other hand, the company's power and fuel-related expenses fell over 19% on year to INR 11.53 billion. 

The company's total cement and clinker sales volume for the March quarter was 9.84 million tonnes, up from 8.77 million tonnes in the previous quarter. The sales volume for the latest quarter was the highest ever quarterly volume achieved by the company, according to the press release. Sales of premium products for the quarter were 15.6% of trade sale volume, up from 11.9% in the year-ago quarter. Its earnings before interest, tax, depreciation and amortisation for the quarter was INR 13.81 billion, up 4% on year and nearly 46% on quarter. The improved profitability was driven by a continued focus on premium products and operational efficiency, Akhoury said. 

With the commissioning of a cement grinding unit at Etah in Uttar Pradesh and another cement grinding unit at Baloda Bazar in Chhattisgarh, the company's total installed cement production capacity has risen to 62.8 million tonnes per annum. The two cement grinding units with a total capacity of 6.4 million tonnes per annum were commissioned in April this year. 

The company's ongoing projects of integrated cement units at Jaitaran in Rajasthan and Kodla in Karnataka are scheduled to be commissioned by the end of the June and September quarters of FY26 respectively, the company said. The company said of the two cement mills with a planned capacity of 6 million tonnes per annum at Jaitaran in Rajasthan, only one will be commissioned now and the other mill will be installed later.

During the quarter, the company also upgraded the capacity of the clinker unit at Nawalgarh in Rajasthan to 4.50 million tonnes per annum from 3.80 million tonnes per annum. The company said it was working continuously to identify suitable opportunities to reach its goal of achieving over 80 million tonnes per annum capacity by 2028.

Shree Cement expects demand for cement to grow 6.5-7.5% during FY26, fuelled by infrastructure projects, rural recovery, and real estate momentum. While there are external challenges in terms of geopolitical conflicts and trade barriers by key economies, the company believes the cement industry in general and Shree Cement in particular would be able to balance growth with sustainability and cost efficiency, it said.  End

Edited by Akul Nishant Akhoury

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