Shree Cement Q1 Results: Net profit rises 84%, board approves Rs 7,000 cr capex plan

Shree Cement shares climb higher on Q1 results, capacity addition plans

Shree Cement recorded a 84.2 percent year-on-year increase in standalone profit at Rs 581.1 crore for the June FY24 quarter, on July 26, driven by other income of Rs 161.7 crore for the given quarter.

Shree Cement posted a better-than-expected set of bottom-line performance.  Bloomberg consensus had estimated net profit of Rs 404.6 crore for Q1FY24.

The company reported volumes growth of 19 percent year on year to 8.92 million for the quarter ended June this financial year as compared to 7. 5 million tonne in the corresponding quarter of the previous year.

In reaction, the stock extended rally and at 11.36 am it was trading nearly 1.5 percent higher at Rs. 24,038 on the National Stock Exchange.

The company in the corresponding quarter of the previous year had reported net profit of Rs 316 crore.

Catch all market updates here LIVE

The standalone revenue for the quarter grew by  18.9 percent to Rs 4999.1  crore compared to Rs 4202.7 the year-ago period. Bloomberg consensus estimate stood at Rs 4623.7 crore. Topline surpassed estimates due to better realizations and volumes.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter stood at Rs 932.6, up 14 percent year on year basis. Bloomberg estimates for EBITDA stood at Rs 913.5 crore.

Power and fuel expenses as a percentage of revenue cooled off to 30.4% during the quarter as compared to 34.3 percent in the corresponding quarter. Employee expenses edged lower to 4.7 percent of the revenue versus 5.2 percent earlier.

Meanwhile, EBITDA margins shrunk  to 18.6 percent for the quarter ended June 30 versus 19.5 percent for the corresponding quarter of the previous year.

Separately, the company board has approved investment worth Rs 7,000 crore for increasing clinker and cement capacity. This will be utilized to set up clinker manufacturing plant of 3.65 million tonnes (MT) at Pali, Rajasthan and cement capacity of 6.0 MT in Rajasthan and Uttar Pradesh by end of FY25.

Additionally, the company will come clinker manufacturing plant of 3.65 MT at Kodla and cement capacity of 6.0 MT at Kodla and Bangalore in Karnataka by end FY25.

The board also has decided to make strategic diversification in Ready Mix Concrete (RMC) business commencing with plan to set up 5 RMC units by FY24. It has also approved raising of funds by way of issuance of Non-Convertible Debentures (NCDs) aggregating to an amount upto Rs 1,000 crores in one or more tranches on private placement basis.