SHREECEM Q2 FY26 earnings call.
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Revenue
₹4,761 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹851 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 mixed Q2 FY2026 with strong profitability improvement but volume headwinds. EBITDA surged 46% YoY to INR 851 crore, driven by 9% price realization growth and premium mix expansion from 15% to 21% of trade sales. Cement volumes rose 6.8% YoY to 7.9 million tonnes, though H1 overall was down 2% as Q1 saw deliberate value positioning. UAE operations delivered exceptional results with 34% volume growth and 158% EBITDA surge, validating the consolidation angle. Management guided full-year volume of 37-38 million tonnes and maintained its value-over-volume strategy, expecting to grow at or slightly above industry rates. Near-term pricing faces pressure from weak post-monsoon demand and festival season. CapEx of INR 3,000 crore planned for FY2027, targeting capacity expansion from 67MT to 72-75MT by March 2027. The 80MT medium-term target may shift to FY2029 depending on demand ramp-up. Key risk: continued volume underperformance versus industry if demand recovery disappoints and premiumization strategy limits market share gains in an expanding capacity environment.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects to achieve 37-38MT volume for FY2026, implying H2 recovery after H1 decline of 2% YoY. Q2 showed 6.8% cement volume growth versus industry estimate of 3-5%.
- Current capacity of 66.8MT will expand to 72-75MT by March 2027 with Jatara kiln commissioned and Kodla integrated plant expected shortly. CapEx of INR 3,000 crore planned for FY2027.
- Company has 24 operational RMC plants currently, with target of 40 plants by FY2028. Entered East India with Raipur plant. Focus on understanding profit levers before accelerating deployment.
Risks flagged
- Management explicitly stated it is 'little too early to project demand' and expects stable-to-lower pricing in Q3 due to festival-related labor shortage and weak demand. GST cut benefits may take time to convert to actual purchases.
- Shravan Shah from Dolat Capital pointed out that 3MT Jatara capacity was postponed, and competitors are aggressively expanding in North India. Management acknowledged 80MT target may slip to FY2029 depending on demand ramp-up and capacity utilization.
- Bhandari admitted that 'value over volume restricts dispatches' and the company will only grow 'in line or slightly better than industry' regardless of new capacity additions. Premium focus may cede market share to less-premium competitors in a demand-scarce environment.
- EBITDA per tonne declined 20% QoQ from INR 1,379 to INR 1,105 despite stable realizations, driven by seasonal volume drop. Analyst questioned other OpEx spike, with management attributing it to repair/maintenance costs. One-off Guntur power substation write-off of INR 30/tonne also masked underlying performance.
Key quotes
- There is no change in the strategy. This is what we would like to keep reinforcing, so it is value over volume. Having said that, and you have seen that in the results when we say 9% realization growth over last year, you should compare it with the industry numbers, and I'm sure you will find that we have not done badly.
- This is a trick question. We have said that we will be growing marginally better than the industry. Now which region, what region, what kind of growth? How do you all forecast this? We have to be prepared. We are having sufficient physical resources to set up capacity in most of the areas where we operate, and we'll take a call as the demand scenario becomes more clear.
- We have said we have done 1,100. Mr. Akhoury has clearly said that he does not expect... He expects some demand vibrancy. He expects stable to a stable pricing scenario. At first we will do 1,100. At best we can do 1,200. I don't know that. I am not saying everything. Maybe we can do 1,300 as well. You will have to have patience, my dear friend. People have been claiming all kinds of EBITDA, never delivered. We don't promise anything. We deliver and then we say.
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