Shree Cement Q2 beats the Street despite steep drop in net profit

Bangur family-promoted Shree Cement Ltd on Monday (November 11) reported an 81% year-on-year (YoY) decline in net profit at ₹93.1 crore for the second quarter that ended September 30, 2024.

In the corresponding quarter of the previous fiscal, Shree Cement posted a net profit of ₹491.3 crore, the company said in a regulatory filing. The CNBC-TV18 poll had predicted a profit of ₹80 crore for the quarter under review.

The company's revenue from operations tanked 18.3% to ₹3,727 crore  against ₹4,585 crore in the year-ago period. The CNBC-TV18 poll had predicted a revenue of ₹3,910 crore for the quarter under review.

Also Read: Balrampur Chini Q2 Results | Net profit slumps 60% to ₹67 crore, revenue falls 16%; declares dividend

At the operating level, EBITDA dropped 32% to ₹592.6 crore in the second quarter of this fiscal over ₹870 crore in Q2 of FY24. The CNBC-TV18 poll had predicted an EBITDA of ₹620 crore for the quarter under review.

The EBITDA margin stood at 15.9% in the reporting quarter as compared to 17.1% in the prior-year period. EBITDA is earnings before interest, tax, depreciation, and amortisation. The CNBC-TV18 poll had predicted a margin of 15.9% for the quarter under review.

"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 a QoQ basis. This coupled with cost optimization and operational efficiency measures drove EBITDA during the quarter," Shree Cement said.

Also Read: PFC Q2 Results | Net profit up 9% to ₹7,215 crore, revenue rises 15%; declares dividend

The cement major reported a 7% YoY decline in total sales volumes, down from 8.20 million tonnes (MT) to 7.60 MT in the quarter ended September, 2024. Cost efficiencies and softer fuel prices helped the company optimise its power and fuel expenses by 27%, which dropped from ₹1,371 crore to ₹1,001 crore.

Through cost optimisation and efficiency measures, total expenditure per tonne (excluding depreciation and interest) fell to ₹4,122, down from ₹4,503 YoY. Sales of premium products represented 15% of the total trade sale volume for the quarter.

The company's ongoing 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 satisfactorily. The company expects to commission all these projects by the first quarter of FY25-26.

Also Read: Fortis Healthcare Q2 Results | Revenue rises 12%, net profit up marginally

The results came after the close of the market hours. Shares of Shree Cement Ltd ended at ₹24,389.75, up by ₹162.15, or 0.66%, on the BSE.