SHREECEM Q4 FY24 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹5,401 Cr
verified against source
Revenue YoY
8%
reported change
EBITDA
₹1,327 Cr
latest reported figure
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Shree Cement delivered best-ever annual volume and profitability in FY24, with total sales rising 8% to 35.5 million tons and operational EBITDA surging 48% to INR 4,364 crore. Q4 FY24 results were equally impressive—EBITDA jumped 49% YoY to INR 1,327 crore on the back of lower fuel costs (down INR 0.70 per kcal to INR 1.82) and operating leverage as capacity utilization improved to 79%. However, cement realizations declined 3% QoQ to INR 4,721 per ton, reflecting weak demand conditions. Management reaffirmed its disciplined growth philosophy, targeting 62+ million tons capacity by FY25 (9-10 million tons commissionable in FY25) while maintaining cost leadership. The company remains debt-free with ~INR 5,000 crore cash. Key risks include demand weakness persisting into H1FY25 due to election and seasonal factors, competitive pricing pressure in a demand-supply imbalance, and the relatively small but growing RMC vertical not yet being material. Guidance includes 40 million tons volume for FY25, 80% capacity utilization target, and Magna premium brand aiming for 12-15% of total sales.
Colored figures show movement against the previous available record.
Guidance to track
- Management maintained its 40 million tons volume guidance for FY25, expecting H2 to be much stronger as government projects kick into full swing after the election period.
- Out of the 18 million tons announced expansion pipeline, 9-10 million tons expected to be commissioned in FY25 itself, taking total capacity to 62+ million tons. Guntur (3 MT) already commissioned in April 2024.
- Management aims to reach 80% capacity utilization in FY25, which would translate to 39-40 million tons production. Lost ~400,000 tons in Q4 due to SAP migration and brand launch events.
- New premium brand Bangur Magna, launched as part of the rebranding exercise, is expected to reach 12-15% of total sales as brand awareness builds through mass media and social media campaigns.
Risks flagged
- Q4 realization declined 3% QoQ despite cost efficiencies. Analysts questioned whether 5-6% sequential price decline is normal. Management deflected by attributing it entirely to demand-supply dynamics, refusing to analyze industry structure.
- South region declined 9-10% YoY in Q4 while peers reported double-digit volume growth. Management did not proactively address this competitive weakness or outline turnaround strategy.
- RMC foray is nascent—greenfield plants take 6-8 months to stabilize and become EBITDA positive. Management acknowledged first year will be crucial but provided limited financial details, noting impact will be 'very small compared to cement business.'
- Management confirmed the first 1.5 months of FY25 have been 'slow' due to election period and seasonal factors. Full-year guidance depends heavily on H2 recovery, which is uncertain.
Key quotes
- By 2028, we intend to have rail connectivity at all our sites. The differential is around 10% to 12% between rail and road on a per ton per kilometer basis.
- We have 3.6 crore equity shares outstanding, and we are sitting at a capacity of 56 million tons. In pro forma this means that for every share we have created, 15 tons of capacity. By 2028, every share will lead to 20 tons of capacity.
- Since 1985 till March 2024, the internal rate of return generated by Shree Cement for its shareholders is north of 24%. We are exactly at 24.44%. This has been possible because of a very astute capital allocation strategy and also our penchant to keep debt-free to protect the sanctity of equity.
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