Shree Cement Q2 FY25 Earnings Profit Falls 81% Amid Revenue Drop, Expansion Plans On Track

On November 11, Shree Cement Ltd, promoted by the Bangur family, announced an 81% year-on-year (YoY) decrease in net profit for the quarter ending September 30, 2024. The company posted a net profit of ₹93.1 crore, compared to ₹491.3 crore in the same period last year. 

Revenue and Operating Performance

Revenue from operations declined by 18.3% YoY to ₹3,727 crore, down from ₹4,585 crore in the previous year. This was below the poll’s expected revenue of ₹3,910 crore. Shree Cement’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) also saw a drop of 32%, coming in at ₹592.6 crore for the second quarter versus ₹870 crore in Q2 of FY24. 

EBITDA Margin and Sales Volume

The EBITDA margin for Q2 FY25 stood at 15.9%, slightly down from 17.1% a year earlier and in line with market expectations. Total sales volume for the quarter fell by 7% YoY, with sales down from 8.20 million tonnes (MT) to 7.60 MT.

Cost Reduction Efforts

With fuel costs decreasing, Shree Cement optimised its power and fuel expenses by 27%, reducing these costs from ₹1,371 crore to ₹1,001 crore. Additionally, the company managed to lower its total expenditure per tonne (excluding depreciation and interest) to ₹4,122, compared to ₹4,503 in the previous year. Premium products contributed to 15% of total trade sales during the quarter.

Expansion Projects on Track

Shree Cement’s expansion projects in Jaitaran, Rajasthan (6 MTPA), Kodla, Karnataka (3 MTPA), Baloda Bazar, Chhattisgarh (3.40 MTPA), and Etah, Uttar Pradesh (3 MTPA) are progressing as planned. The company anticipates Q1 of FY25-26 will commission these projects.

On November 12, 2024, Shree Cement share price opened at ₹23,500.00 and touched the day low of ₹23,500.00 at 09:36 AM.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.