Shree Cement Expects To Achieve More Than 20% Margin Over Next Six Months

Shree Cement Ltd. sees margin at over 20% over the next six months, according to its Managing Director HM Bangur.

The company posted volume and revenue growth of 23% and 15%, respectively, in the quarter ended December.

“The strategy was to achieve strong volume growth and then concentrate on improving margins and realisations. If we reduce volume by 5%, realisations will automatically improve,” Bangur told BQ Prime.

In Q3, the company reported a profit of Rs 277 crore as against Rs 492 crore in the third quarter of the previous fiscal. It also exceeded its Q3 FY23 volume target of 7.8 million tonnes to achieve 8 million tonnes.

According to Bangur, Shree Cement will emphasise on volume growth and price hikes in the fourth quarter of the fiscal.

He expects realisations to improve due to lower logistic costs and higher share of premium products—which will increase to 20% from 8% at present in the next two quarters—in the overall product mix.

The company’s current capacity utilisation stands at 72%, which is expected to rise to 75-76% in the fourth quarter of the fiscal, and 80% in FY24. The company is aiming for a total capacity of 53 million tonnes, a year from now, Bangur said.

According to him, they expect to nearly double capacity by FY30 via the organic route. “In the process, some inorganic capacity may come, but the company have no visibility on the same,” he said.

South and west regions may witness higher growth compared to the rest of India, he said.