Shree Cement Ltd (SHREECEM) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Shree Cement Limited Q2 FY27 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Gupta from ICICI Securities Limited. Thank you, and over to you, Mr. Gupta.
Moderator: Mr. Gupta, kindly unmute your line, please.
Navin (ICICI Securities): Yeah. Can you hear me?
Moderator: Yes, sir, we can hear you.
Navin (ICICI Securities): Yeah. So, this is Navin here. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q2 FY27 earnings call of Shree Cement Limited. On the call from the management, we have with us, Mr. Neeraj Akhoury, Managing Director; Mr. Subhash Jajoo, CFO; Mr. Khandelwal, Company Secretary; and also Mr. Jain, Joint
Navin (ICICI Securities): Finance. So without any further ado, I hand over the call to the management for their opening comments. Over to you, sir.
Neeraj Akhoury (Shree Cement Ltd): Thank you Navin. Good afternoon ladies and gentlemen, and welcome to Shree Cements Limited earning call for the quarter ended 30th September '26. Before we begin, I want all of us to remember Mr. Ashok Bhandari, our special advisor. He passed away suddenly two days after our Q1 results call. Many of you know him from these calls. He earned the trust of the investor community. During his tenure, the market cap of Shree Cement grew significantly. At work, I will still remember him as a person who was firm and direct. With people, he was warm and cared. His passing is a real loss for Shree Cement and for everyone who worked with him. We will miss him. We miss him every time. Our condolences are with his family. May his soul rest in peace. Going into our quarterly performance, the second quarter is usually a softer quarter for the cement industry. This year, it was also affected by the conflict in West Asia and by a weak monsoon in most regions. The East was was an exception. Against this backdrop, our focus on volumes continued to deliver results. India sales volumes increased by approximately 18% year-on-year from 7.91 million tons to 9.31 million tons. Realizations improved marginally by 1% from ₹4,840 per ton to ₹4,870 per ton. Consol EBITDA rose by about 4% from 974 crore to 1,016 crore. However, consolidated EBITDA per ton declined to ₹966 from ₹1,055 a year ago primarily due to a higher fuel cost. Consol sales volume also grew by about 14% from 9.3 million, 9.23 million tons to 10.52 million tons. This improvement in volumes was also supported better capacity utilization in our India operations, which increased to 56% compared to 52% in the corresponding quarter last year. On a sequential basis, against the first quarter, the numbers are lower, which is what this season usually brings. Volume India volume fell fell 11% from 10.49 million tons to 9.31 million tons. Realization was 1% lower at ₹4,870 against ₹4,919. Consol EBITDA declined from ₹1,272 crores to 1,016 crores, while EBITDA per ton moved to ₹966 from ₹1,111. Consol sales volumes were down by 8% from 11.45 million tons to 10.52 million tons. Our capacity expansion program continues to progress. In September '26, Union Cement Company, our step-down subsidiary in the United Arab Emirates, commissioned a new cement mill with an annual capacity of 3 million tons. This takes its total cement production capacity to 7 million tons per annum. In India, work is progressing on our Greenfield integrated plant in Meghalaya, which is expected to be commissioned in the quarter ending 31st March 2028. We continue to evaluate and pursue strategic cost expansion opportunities across our markets with a focus on building capacity and delivering our long-term growth objectives. Few words on ready-mix concrete business. Our ready-mix concrete continues to grow and it continued to grow last quarter also. The commercial network is now 28 plants with captive units, the total is 35 plants. The plants have been running longer which have been running longer did quite well, and the new ones are ramping up. Volume rose 153%, 153% year-on-year to 2.73 lakh cubic meter. Revenue rose 182% to 129 crores. The business stayed EBITDA positive. As each plant fills up, its fixed cost is spread over
Neeraj Akhoury (Shree Cement Ltd): 4 cubic meters and that shows in the numbers. We have said for some years that ready mix is where cement in India is heading. This quarter is a small step in that direction. As you all know, sustainability remains an integral part of our operating strategy. In Q2 FY27, green electricity accounted for 65.2% of total electricity consumption, including our wholly-owned subsidiaries in India. I believe this are amongst one of the highest levels in the Indian cement industry, if not the global cement industry. Our green power generation capacity currently stands at 667 MW, including our wholly-owned subsidiary in India. And we are progressing additional projects to further increase the share of green power in our energy mix. For us, saving energy and saving cost are the same work. Every unit of green power we add makes button cleaner and not only cheaper to produce. All our manufacturing locations operate on a zero liquid discharge basis, treating, recycling, and reusing 100% of the wastewater generated by our operations. These initiatives helped us to achieve a water positivity index of more than eight times in in FY25. We remain committed to sustaining and improving this performance in the current financial year. October month is also the month of of our great leader Mahatma Gandhi, who very aptly said, "To destroy something is easy; to build requires great skill and care." This thought resonates strongly with our business. Building a sustainable enterprise requires the same discipline and care, not only in the quality of our product, but also in how we serve our customers, invest for the future, and contribute to nation building. In terms of the outlook, India economy remains supportive. Infrastructure investment, urbanization, and stable macroeconomic conditions are are all helping. A weak monsoon may hold back rural demand for some time, but spending on road, railways, housing, and data center continues. And that will keep India's cement demand moving in a positive direction. We remain focused on strengthening our market positions, improving operational efficiency, and executing our growth plans while navigating the near term pressures facing the industry. With these remarks, I now hand over the mic to our colleague Mr. Subhash Jajoo, Mr. K.K. Jain, and Mr. H.S. Khandelwal for your questions. I am very confident that you are in good hands. Since we are in a cement business, we'll try to make sure this discussion does not set very quickly and that your questions are well answered. Thank you, Naveen. We can we can now open for Q&A.
Moderator: Thank you very much. We will now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Parth Bhavsar from Investec. Please go ahead.
Parth Bhavsar (Investec): Yeah. Hi, sir. Sir, I I wanted to get a sense on fuel cost. So, what was our landed fuel cost on kcal basis? And how do we see this going ahead into Q3 and Q4?
Subhash Jajoo (Shree Cement Ltd): For the current quarter, the landed cost was 2 rupee 9 paisa as against 1.66 last year and 1.95 for the June quarter. And for the quarter coming quarter, we believe this will be around 2.15 to 2.20.
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