SHREECEM Q1 FY25 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹5,124 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹916 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Shree Cement reported a challenging Q1 FY25 with volumes growing 8% YoY to 9.64 million tons but realizations declining 6% to INR 4,469/ton due to adverse geographic mix shift toward lower-realization East markets and weak demand from elections and extreme weather. EBITDA declined 2% YoY to INR 916 crore as stabilization costs at newly commissioned Guntur and Navalgarh plants (INR 52 crore) and increased logistics costs (lead distance up 21km QoQ) offset fuel cost savings. The company commissioned its 3 mtpa Guntur integrated unit and achieved 1 GW of installed power capacity with 54% green power share. Management explicitly guided Q2 will be weak due to delayed government project execution (budget still pending presidential assent) with demand revival expected only in Q4 FY25. Despite near-term headwinds, management emphasized cash profit focus (INR 957 crore vs INR 898 crore YoY) over net profit. Key risks include ongoing pricing pressure from weak demand, M&A consolidation efforts keeping prices depressed, and South region underperformance.
Colored figures show movement against the previous available record.
Guidance to track
- Government budget still pending presidential assent (expected third week August), followed by resource allocation and tendering. Major demand revival only expected from September/October onwards.
- Even if government tenders float by end-September, Q3 loses ~10 working days due to Diwali and Chhath Puja festivals. Only Q4 FY25 expected to see meaningful demand recovery.
- Current 54% green power share will increase to 62% with commissioning of 135 MW additional solar capacity across manufacturing locations.
- With commissioned capacity now at 56 mtpa, annual depreciation charge is expected at approximately ₹2,600 crore going forward.
Risks flagged
- Management explicitly stated prices will continue weakening as long as demand remains weak. Consolidation M&A activity is also deliberately keeping prices depressed as acquirers seek better bargains.
- Guntur (commissioned April 2024) and Navalgarh plants have consumed ₹52 crore in additional stores and spares. Normalization typically takes 3-6 months but can extend to 12 months per management.
- South volumes declined 5% YoY and 4% QoQ with realizations also under pressure. Management acknowledged South market weakness but expects improvement from Andhra Pradesh infrastructure spending (₹15,000 crore allocation).
- Management admitted non-trade component has increased in Q1, which typically carries lower realizations than trade sales. Reversal of this mix shift could provide margin tailwind upon demand recovery but timing remains uncertain.
Key quotes
- Cash is real, rest is myth. Please be very careful while making any analysis based on net profit numbers.
- Q2 for sure is not going to be good for the industry... Even if all the tenders get floated by end September or early October, I don't think major changes will happen in demand scenario in Q3 as well.
- The guys who are the contenders for such consolidations would like to keep the prices of cement depressed to have a better bargain. This is one of the major factors why the prices are not being increased.
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