Informist, Wednesday, May 15, 2024

--Shree Cement: Have sufficient cash to meet capex needs 

--Shree Cement: See rail connectivity to all sites by 2028 

--Shree Cement: See movement of 25% pdts through rail in 3-4 years 

--Shree Cement: Currently moving 88% of pdts through roads 

--Shree Cement: Sales in eastern India rose 20% YoY Jan-Mar 

--Shree Cement: Sales in south India declined 9-10% YoY Jan-Mar 

--Shree Cement: Expect to commission 9-10 mtpa cement capacity FY25 

--Shree Cement: Cement realisation for Jan-Mar was 4,721 rupees/tn 

--Shree Cement:Jan-Mar power ops sales 4.4 bln rupees vs 3.4 bln yr ago 

By Shiladitya Pandit and Anshul Choudhary

MUMBAI – Cement maker Shree Cement Ltd reported a strong on-year growth in its bottomline during Jan-Mar, even as its revenues grew at a slower pace, as sluggish cement prices were partially made good by an 8% on-year growth in sales volume, and also as fuel costs continued their downward trend. The company's earnings before interest, taxes, depreciation, and amortisation for the quarter also increased on year, although realisations dipped slightly.

The net profit for Jan-Mar was 6.62 bln rupees, higher by 21.2% on year, although it moderated by 9.9% over Oct-Dec. Revenue from operations in Jan-Mar was 51.01 bln rupees, higher by 6.6% over the same quarter last year, and also up by 4.1% sequentially. The EBITDA for the quarter was 13.27 bln rupees, up 49% on year, while the operating margin for the Jan-Mar quarter was 29%, compared with 21% in the year-ago period. 

In a post-earnings call with investors, Shree Cement's management said that sales in eastern India for the company grew 20% year on year, while growth in northern India was slower. Sales in southern India declined by around 9-10% on year for Jan-Mar, the company's management added. Shree Cement reported a total sales volume of 9.53 mln tn, up 8% on year.

During the call, the company's management said that cement realisation for Jan-Mar was 4,721 rupees per tn, lower than the 4,848 rupees per tn reported in the year-ago period. In Jan-Mar, revenues from the company's power operations increased to 4.4 bln rupees, against 3.4 bln rupees a year ago.

The company's management added that it was aiming for all of its sites to be connected by rail by 2028, with Shree Cement also looking to shift more movement of products to rail from roads, due to a cost advantage in favour of railways. In three to four years, the company said that it expects to move around 25% of its products on railways, with Shree Cement currently moving around 88% of its products by road.

Shree Cement said that it expected to commission around 9-10 mtpa cement capacity in 2024-25 (Apr-Mar), in line with the company's longer-term goal of reaching a capacity of 80 mtpa. The management said that it has "sufficient cash" to service the required capital expenditure for the expansion.

Today, shares of Shree Cement closed 0.8% lower on the National Stock Exchange at 25,819.65 rupees.  End

Edited by Akul Nishant Akhoury

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