Shree Cement Q2 results: Profit slips 81%; margins fall 319 bps

For the July quarter, midcap cement company Shree Cement released its quarterly results on Monday after market hours. The company's standalone profit for the reporting quarterly slipped sharply by 81 per cent from Rs 490 crore in Q2FY24 to Rs 93.1 crore.  In the previous June quarter, the company's net profit was reported at Rs 317 crore. 

Revenue at the cement manufacturing company during the quarter reduced to Rs 3,730 crore in comparison to Rs 4,560 crore in the same period last year.

Zee Business research estimated profit and revenue at the company at Rs 4,163 crore, down 9 per cent, while the PAT was estimated to sink 84 per cent on-year to Rs 78.4 crore in the September quarter.

On the operational front, EBITDA came in at Rs 590 crore as against Rs 870 crore in the previous year's same quarter, while the EBITDA margin slipped 3.18 per cent or 318 basis point to 15.9 per cent. The margins were expected at 16.1 per cent as against 19.08 per cent in Q2FY24.

Analysts expected a drag in the company's earnings and an impact on both the realisation as well as revenue due to decline in cement prices during the quarter. Zee Business research estimated realisations to see a degrowth of 9 per cent.

Further. there was expectation that new capacity expansion will support volume growth at the company during the review quarter.

Despite the challenging demand conditions on account of prolonged monsoon and softer prices faced by the industry, the company’s focus on maintaining brand equity, product premiumization and improving geo-mix helped maintain its realisation on QoQ basis. This coupled with cost optimization and operational efficiency measures drove EBITDA during the quarter, added the company's press release.

Neeraj Akhoury, Managing Director, Shree Cement Ltd. said, "The company expects gradual improvement in demand driven by increased government spending in the second half of the financial year and improved demand from urban and rural segments owing to good monsoon. Shree Cement remains focused on its long-term growth and sustainability, with ongoing investments in capacity expansion and the adoption of greener technologies.” 

Shree Cement share price performance

Ahead of the company's earnings today, shares ended weak by 0.5 per cent at Rs 24,419.55 per share. In the last one year, the company's share price gave a negative return of over 7 per cent and is currently trading near 52-week low price of Rs 23,700.