Shree Cement reported a 14% year-on-year increase in consolidated sales volumes to 10.52 million tons for the recent quarter. While India operations saw higher capacity utilization, profitability was pressured by a rise in landed fuel costs to INR 2.09 per kCal. The company remains focused on reaching an 80 million-ton capacity target and is successfully scaling its ready-mix concrete segment.
Shree Cement Reports 14% Volume Growth Amid Margin Headwinds
Consolidated sales volume reached 10.52 million tons, while India operations saw 18% growth.
Consolidated EBITDA stood at INR 1,016 crores, impacted by rising landed fuel costs.
Reader Takeaway: Strong volume growth is offset by higher fuel costs; focus remains on capacity expansion and premium product mix.
What just happened
Shree Cement delivered a resilient performance with consolidated sales volumes growing 14% YoY. Indian operations were a highlight, with capacity utilization rising to 56% from 52% in the same period last year. Realizations in the domestic market saw a marginal uptick of 1%. The company also achieved a massive 153% volume surge in its ready-mix concrete segment, generating INR 129 crores in revenue.
Why this matters
Investors are watching how the company navigates cost pressures. Fuel costs rose to INR 2.09 per kCal compared to INR 1.66 a year ago. Management has shifted its fuel mix significantly, reducing pet coke dependence from 66% to just 11% to mitigate price volatility. Despite the seasonal softness of the second quarter, the company is maintaining its full-year volume guidance of 40-41 million tons.
Capacity and Strategy
The company successfully added 3 million tons of capacity in the UAE, bringing its regional footprint to 7 million tons. In India, work on the Meghalaya plant is back on track following the resolution of local issues, with commissioning targeted for March 2028. The long-term strategy remains aggressive: targeting a total capacity of 80 million tons and increasing the share of premium products to over 40% from the current 29%.
Risks to watch
Margin pressure is the primary concern, with management guiding for continued high fuel costs between INR 2.15 and INR 2.20 per kCal. Furthermore, weak monsoons have created a degree of uncertainty regarding rural demand, and efficient execution of the greenfield projects in newer markets like Gujarat and South Karnataka will be vital for profitability.
What to track next
Management expects a recovery in the second half of the year, driven by sustained demand from the infrastructure, railway, and data center sectors. Shareholders should track the impact of the ongoing fuel-mix optimization on EBITDA per ton in the coming quarters.