Copyright thehindubusinessline
Shree Cement, India’s third-largest cement maker by capacity, will continue to prioritise value over pure volume growth in the coming years as well, focusing on sustainable margin expansion. The company has fully passed on the benefits of GST rate reduction on cement from 28 per cent to 18 per cent to the customers and it feels that this tax rate reduction will support long-term demand growth. North India will remain one of the areas, where the company will continue to evaluate all possible methods to grow in the coming years. “Last quarter (Q2FY26), the Government of India took a significant decision of reducing the GST rate on cement from 28 per cent to 18 per cent along with various other commodities. We believe this was a very positive and a transformational step, and augurs well for cement demand in the long term. The company has fully passed the benefit of GST rate rationalisation to its customers. The company continued with its value over volume strategy,” Shree Cement Managing Director Neeraj Akhoury told analysts during an earnings call. Premiumisation push Driven by volumes, premiumisation push and value over volume strategy, the company reported around 15 per cent year-on-year increase in its standalone revenue for the second quarter this fiscal to ₹4,303 crore. While operating profit grew 44 per cent at ₹851 crore, net profit increased 198 per cent to ₹277 crore during the period. During the quarter, total cement sales volume was up 6.8 per cent. “On premium cement, we grew from about 15 per cent to about 21 per cent this year. This has been possible with a very high focus on increasing our share in the premium product segment. Not only that, we have also worked on our general price levels and to make sure that we are able to squeeze our brand equity in a better way. That has been the strategy, which we have often defined as value over volume. And this strategy is something that we would like to pursue in the coming years as well,” Akhoury pointed out. During the second quarter, the company commissioned a clinkerisation line of 3.65-mtpa (million tonnes per annum) capacity of its integrated project plant at Jaitaran, Rajasthan. The cement mill of 3 mtpa at this site is also expected to be commissioned soon. The company informed that the work on the integrated project at Karnataka’s Kodla of 3-mtpa cement capacity is in the final stage of completion. “North remains our focus, and will remain one of the areas where we will continue to evaluate all possible methods to grow in the coming years as well. Having said that, we are growing in other regions, be it East or South. But our focus on North will never go down,” he said. “Shree Cement’s capacity expansion strategy remains firmly on track, reflecting its commitment to narrowing the scale gap with larger peers and strengthening its market position. The company’s current installed capacity stands at 62.8 mtpa across India, and with ongoing projects advancing as planned, total capacity is expected to reach 68.8 mtpa by FY26-end. This well-calibrated expansion underpins a projected volume CAGR of around 6 per cent over FY25-27E, supported by enhanced regional presence and incremental contributions from new capacities,” said Axis Securities in a report. According to Elara Capital, the expected completion of ongoing expansion projects, coupled with an improving demand outlook in the second half of this fiscal, bodes well for healthy volume growth for the cement major. “Further, continued focus on premiumisation, higher green energy adoption, and other cost-optimisation initiatives should aid margin improvement,” it added. Published on October 29, 2025
