Shree Cement's Q1 Net Profit Drops by Over Half, Sales Volume Increases

Shree Cement Ltd, promoted by the Bangur family, revealed a 51.31% drop in its consolidated net profit for the first quarter ending June 2024. The net profit stood at Rs 278.45 crore, down from Rs 571.94 crore in the same period last year, as per an exchange filing by the company.

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Despite the decline in profit, Shree Cement's revenue from operations increased by 1.73% to Rs 5,123.96 crore during the quarter under review, compared to Rs 5,036.65 crore in the corresponding period of the previous fiscal year. The company's total expenses rose by 10.05% to Rs 4,957.24 crore in the June quarter.

Operational Performance and Sales Volume

The total sales volume of Shree Cement increased by 8%, rising from 8.92 million tonnes to 9.64 million tonnes, according to the company's earnings statement. Premium product sales accounted for 7.6% of the total trade sale volume during this period.

In terms of EBITDA, Shree Cement experienced a slight reduction of 2%, falling from Rs 933 crore to Rs 916 crore in the April-June period. Managing Director Neeraj Akhoury commented on these results, stating: "We continued to optimise our production processes, enhance cost efficiencies and maintain a strong focus on branding initiatives."

Future Outlook and Expansion Plans

Akhoury also discussed the company's future outlook, emphasising that Shree Cement will focus on increasing its cement manufacturing capacity to gain market share. He noted that consistent product quality positions them well to benefit from an anticipated rebound in cement demand driven by infrastructure allocation in the Union Budget, rising housing demand, and expected rural sector growth.

Updating on capital expenditure plans, Shree Cement announced the commissioning of its integrated cement unit at Guntur, Andhra Pradesh with a capacity of 3 million tonnes per annum (MTPA). Additionally, ongoing expansion projects in Jaitaran (Rajasthan), Kodla (Karnataka), Baloda Bazar (Chhattisgarh), and Etah (Uttar Pradesh) are progressing as planned.

Market Position and Share Performance

Shree Cement is recognised as the third-largest cement manufacturer in India and owns brands such as Roofon, Bangur Power, Shree Jung Rodhak, Bangur Cement and Rockstrong. On Tuesday, Shree Cement Ltd shares closed at Rs 26,121.95 apiece on BSE, marking a decrease of 2.28% from the previous close.

The company is working on further expanding its capacities across different regions to meet its targets ahead of schedule. This strategic move aims to strengthen its market position amidst challenging conditions marked by sluggish demand due to general elections and extreme weather.

Shree Cement remains committed to delivering value to its stakeholders through continuous optimisation of production processes and cost efficiencies while maintaining a strong focus on branding initiatives.