Shree Cement dials back on expansion following Adani’s move | Company Business News

Shree Cement Ltd, India’s third-largest cement maker by capability, has dialled back its expansion plans simply weeks after bigger rival Adani Cements flagged the same move.

The shift indicators a possible cooling of the aggressive capacity-addition cycle amongst India’s high cement producers, who had been racing to scale up output.

“We now have slowed down the capex (capability expansion) as a result of even within the final concall of one in all our opponents, they’ve additionally slowed their aggression. So we are going to trip the wave as it’s,” chief monetary officer Subhash Jajoo informed analysts responding to a query on expansion in a post-earnings interplay.

Ambuja Cements had stated within the final quarter’s analyst name that it was open to pushing back its FY28-end goal of reaching 155 million tonnes each year (mtpa) capability to FY30 because it appears to lift utilization of its present capability.

“We’re on file saying that we should always attain 80 million tonnes by 2029. However then, please perceive, it is a dynamic scenario,” Jajoo stated.

Shree Cement Ltd beat Road expectations on income in FY26, as volumes helped cushion rising enter prices linked to the West Asia struggle.

The corporate reported a consolidated income of ₹20,943.47 crore for the 12 months, rising about 9% in FY26, in response to alternate filings, above the consensus estimate of ₹20,748.63 crore of 18 analysts polled by Bloomberg. Revenue attributable to house owners rose 55% to ₹1,743.56 crore for fiscal 12 months 2026, in comparison with ₹1,122.77 crore final 12 months.

At current, the corporate has a home cement manufacturing capability of 69.3 mtpa.

Ebitda rose to ₹4,637.86 crore in FY26 from ₹3,934.03 crore in FY25, and margins elevated to 22.1% from 20.4%.

For the March quarter, the cement maker reported a ten% rise in income from operations to ₹6,101 crore however a 8% decline in web revenue to ₹525.69 crore, as gross sales had been down because of the West Asia disaster.

“For the reason that final two months, because of the stress prevailing within the Center East, gross sales have slowed down, however with the ceasefire, the scenario is step by step coming back to regular. We imagine as soon as peace is restored, demand will bounce back because of the reconstruction work,’ he stated.

The corporate stated prices are rising throughout the board, primarily because of increased gas, packaging and transport bills. Gas prices are anticipated to rise by about 10% within the close to time period, whereas complete prices might improve by round ₹150– ₹200 per tonne. Packaging prices are additionally rising and will improve by about ₹100 per tonne going ahead. On the similar time, transport prices have additionally elevated.

Administration stated the associated fee scenario is “very dynamic” as a result of world gas costs hold altering, and even with sufficient stock, increased costs slowly influence prices. The corporate is making an attempt to regulate prices by altering its gas combine and enhancing logistics, however added that the whole trade is dealing with related pressures and elevating costs to handle them.

“The trade as an entire is struggling on these two accounts… there’s a acutely aware effort… to attempt to have a worth rise which ought to mitigate this price improve,” Jajoo stated.

Nonetheless, going ahead, the administration is constructive on demand. The chief monetary officer expects cement demand to develop not less than by 7%. “If India must develop at 7%, metal and cement ought to develop not less than in tandem with that, if no more,” Jajoo stated.

The corporate additionally declared a remaining dividend of ₹70 per share for FY26. Consequently, the full dividend for the 12 months stands at ₹150 per share, representing a 36% improve over the ₹110 per share dividend paid in 2024-25.

Shree Cement’s FY26 efficiency has been combined with a better focus on worth over quantity, resulting in marginal quantity progress, however realizations improved, stated Manish Valecha, co-head of analysis and lead cement analyst at Anand Rathi Securities.

In comparison with friends, the efficiency has been slower due to increased publicity to North and East, the place pricing has been aggressive, and it hasn’t had the identical inorganic enhance in quantity from giant acquisitions, he stated. Going ahead, Ebitda per tonne restoration, quantity progress vs trade, pricing self-discipline, price effectivity and capability ramp-up might be watched.

The Anand Rathi analyst believes demand ought to stay respectable however not exceptionally sturdy. “Authorities infrastructure, housing and seasonality help dispatches, however near-term demand can nonetheless be uneven due to climate (excessive warmth) and geopolitical points. Pricing is the larger uncertainty. The trade has taken small hikes, however sustainability relies upon on monsoon depth, Aggressive self-discipline, enter price stress, and so on.,” Valecha stated.