Shree Cement outlook remained focused on higher sales volumes at its October 23, 2026 earnings call, with management retaining full-year guidance of 40–41 million tonnes despite rising fuel costs. India sales volumes grew approximately 18% year on year in the second quarter of FY2027, but weaker earnings per tonne limited the increase in consolidated operating earnings.
Key Takeaways
- Management retained annual volume guidance of 40–41 million tonnes, with 41 million tonnes described as achievable.
- Fuel costs are expected to rise further in Q3 after reducing second-quarter earnings per tonne.
- A larger premium-product share and higher volumes are management’s main levers for supporting profitability.
Table of Contents
- Shree Cement outlook keeps annual volume target intact
- Fuel guidance points to continued cost pressure
- Premium products and energy changes support efficiency
- Expansion plans retain a staged timetable
- Conclusion
Shree Cement outlook keeps annual volume target intact
Managing Director Neeraj Akhoury reiterated the full-year volume target after India sales reached 9.31 million tonnes in Q2. He estimated industry demand growth at 7%–10% during the quarter and said Shree should grow slightly faster than the industry if second-half demand expands by around 7%.
The demand outlook was not unconditional. Akhoury identified the weak monsoon as the main concern for rural consumption. His comments therefore paired confidence in the company’s annual target with caution about the strength of the wider market.
Consolidated earnings before interest, tax, depreciation and amortisation increased about 4% year on year to INR1,016 crore. However, EBITDA per tonne fell to INR966 from INR1,055. Higher sales supported total operating earnings, but each tonne generated less EBITDA than a year earlier.
| Item | Details |
|---|---|
| First-half capital expenditure | INR895 crore. |
| Second-half capital expenditure outlook | INR700–INR800 crore expected. |
| Consolidated net cash | INR8,168 crore. |
| Ready-mix concrete | Volumes increased 153% and revenue rose 182%; the business remained EBITDA positive. |
| Freight lead distance | 427 kilometres, compared with 445 kilometres in Q1 and 441 kilometres a year earlier. |
Fuel guidance points to continued cost pressure
Chief Financial Officer Subhash Jajoo said landed fuel costs reached INR2.09 per kilocalorie in Q2, compared with INR1.95 in Q1 and INR1.66 a year earlier. Based on the order pipeline, he guided to INR2.15–INR2.20 per kilocalorie for Q3.
Blended production costs also increased, reaching INR4,636 per tonne from INR4,329 in the previous quarter and INR4,245 a year earlier. Akhoury nevertheless expected overall Q3 costs to be broadly similar to Q2, with higher volumes providing some operating leverage, while warning that items such as bag costs remained volatile.
Akhoury said October cement prices were better than September prices, but did not confirm the specific INR20–INR25 per bag increases raised during the call. Pricing remained dependent on supply and demand.
Premium products and energy changes support efficiency
Premium products accounted for 29% of the product mix, up from 21% a year earlier and 23% in Q1. Management’s internal target is to exceed 40% around FY2028–29. Akhoury said premium products sell for INR25–INR35 per bag above base products, with some newer products commanding a larger premium.
Green electricity represented 65.2% of total electricity consumption in the quarter. The company also sharply reduced pet coke use, which accounted for 11% of its fuel mix versus 66% a year earlier, as higher pet coke prices prompted a shift toward other fuels.
Shree Cement’s energy-efficiency and alternative-fuel initiatives provide background to these operating changes. Its sustainability policy describes multi-fuel boilers capable of using biomass, agricultural waste and tyre waste to reduce reliance on non-renewable fuels; that policy description is separate from the latest quarterly figures.
Expansion plans retain a staged timetable
For the Meghalaya greenfield plant, Akhoury said contractors had mobilized, orders had been placed and construction was set to begin soon. Commissioning remained targeted for the quarter ending March 2028, rather than being a completed capacity addition.
In the UAE, management expected similar second-half volumes to the approximately 2.1 million tonnes achieved in the first half. The newly commissioned 3 million tonne mill was expected to operate at 30%–40% utilization, underscoring that new capacity would take time to contribute fully.
Conclusion
The next test for the Shree Cement outlook is Q3 performance: whether higher volumes and a richer product mix can support profitability as fuel costs rise toward management’s guided range. The annual volume target remains unchanged, while Meghalaya commissioning is still planned for the quarter ending March 2028.
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