Top Indian Companies: Shree Cements

Shree Cement is an Indian cement manufacturer, founded in Beawar, Rajasthan, in 1979. Now headquartered in Kolkata, it is one of the biggest cement makers in Northern India.

It also produces and sells power under the name Shree Power (Captive Power Plant) and Shree Mega Power (Independent Power Plant).

Its plants are located in Beawar, Ras, Khushkhera, Jobner (Jaipur) and Suratgarh in Rajasthan, Laksar (Roorkee) in Uttarakhand, Panipat in Haryana, Bulandshahar in UP, Raipur in Chhattisgarh and Aurangabad in Bihar. Shree cements was clearly the second largest cement company in India in 2018. Shree Cement is a Nifty 50 company with a weightage of 0.47% on the index.

Shree Mega Power

The company produces and sells power under the brand name Shree Power and Shree Mega Power.

Shree Power

The company has installed 120 MW captive power plants split into two locations (Beawar & Ras) to meet the complete power needs of a 15 million tonne Integrated Cement Plant.

Shareholding Pattern

The Shareholding Pattern page of Shree Cements Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.Holder's Name No of Shares % Share Holding

No of Shares 36080748 100%

Promoters 22569797 62.55%

Foreign Institutions 4707632 13.05%

Banks/Mutual Funds 2792183 7.74%

Others 3966189 10.99%

General Public 1048915 2.91%

Financial Institutions 996032 2.76%

FY2022-23 Q4 and Full Year Results

Shree Cement on Friday reported a 15 per cent year-on-year (YoY) drop in net profit at Rs 546 crore for the March quarter compared with Rs 645 crore in the same quarter last year.

Sales for the quarter rose 17 per cent YoY to Rs 4,785 crore compared with Rs 4,099 crore in the same quarter last year.

Total sale volume increased 10 per cent sequentially to 8.83 million tonnes in the March quarter compared with 8.03 million tonnes in the same quarter. Proportion of premium products sale against total trade cement sale stood at 7.5 per cent in the March quarter against 7.2 per cent in the December quarter.

Shree Cement said it has been actively working on achieving its goal of beyond 80 million tonnes capacity. It said the commissioning of Purulia grinding unit with capacity of 3 mpta is scheduled by end of Q1FY24; Nawalgarh project with 3.50 mtpa capacity is progressing on schedule and that the company expects the commissioning to be achieved by end of Q3FY24. Shree Cement said it is also progressing strongly on project in Guntur district of Andhra Pradesh, which should be commissioned early next financial year.

Managing Director Neeraj Akhoury at Shree Cement said: “Shree Cement has delivered a robust set of revenue & Ebitda growth while strongly pursuing our journey to remain the greenest cement company with world class performance indicators. We are driving prioritised initiatives to increase green power, usage of alternative fuels, process automations combined with advanced digitalisation of the operations to deliver superior performance."

The improved performance during this quarter is testimony of such initiatives amidst the challenge of managing high fuel costs, Akhoury said.

"Our resolve to step up actions on strengthening brand equity is under execution and we are confident to deliver volume growth with focus on premium cement creating enhanced value for our customers.”

Akhoury added: “we continue to execute sharp action plans to reach beyond 80 million tonnes cement capacity in the coming years. Our growth plan will add significant value to our business and provide opportunities for all our stakeholders.

Given the government’s focus on infrastructure growth in the Union Budget 2023-24 through higher allocation for road construction projects, Pradhan Mantri Awas Yojana (PMAY), ever highest capital investment outlay, and other overall buoyancy in the economy, cement sector is likely to continue robust growth in coming year as well, the company said.

The board of directors declared a second interim dividend of Rs 55 per share for FY23. Earlier in the year, the board had declared an interim dividend of Rs 45 per share.

Total dividend for the year worked out to Rs 100 per share compared with a total dividend of Rs 90 per share in the year.

Brokerage Outlook

Nirmal Bang Institutional Equity expect operating cost/mt for SRCM to peak out in 4QFY22 and believe that demand recovery will drive pricing higher to cover the impact of elevated costs on margins. Brokerage have marginally tweaked our assumptions and our current FY23 and FY24 EBITDA estimates have been revised lower by ~5%. Nirmal Bang maintain their Accumulate rating on the stock with a revised target price (TP) of Rs27,393.

ESG

Shree Cement have always been conscious about our GHG footprint and have taken many initiatives to keep our emissions under control. Our approach had been both innovative and collaborative.

We have done substantial investment for achieving energy efficiency and many of the initiatives we had adopted were newly launched in markets and did not have many trial results in the cement industry.

We have focused on increasing our renewable energy share in our power generation portfolio. To increase our renewable energy capacity, we commissioned several renewable energy projects.

As part of compliance to Renewable Purchase Obligations (RPO), we have procured non-solar and solar non-transferable.

We use waste from other industries to reduce our dependence on natural resources. These waste products can be used as a substitute for fossil fuels and other raw materials, providing us with an excellent opportunity to

Water management is an integral part of our operations; our two-fold approach for water management includes conservation initiatives in and around plant sites as well as organise boot camps for sensitisation locals.

Recycling water, rainwater harvesting, recharging of groundwater, employing water efficient technology and maintaining ZLD is a standard across our manufacturing sites.