homebusiness Newscompanies NewsShree Cement sees demand for premium products aiding growth amid real estate upswing
Shree Cement sees demand for premium products aiding growth amid real estate upswing
According to HM Bangur, Chairman of Shree Cement, investment in real estate by high-net-worth individuals (HNIs), particularly in smaller cities, is fueling demand for better-priced premium cement products.
HM Bangur, Chairman of Kolkata-based Shree Cement expects a healthy volume and EBITDA (earnings before interest, tax, depreciation, and amortisation) growth this year.
In a conversation with CNBC-TV18, he noted that apart from the government's efforts in infrastructure development ahead of the elections and the general upswing in real estate, a key driver of the growth in cement business is the increasing demand from high-net-worth individuals (HNIs).
These HNIs are investing in premium properties, particularly in smaller cities and villages, thereby generating substantial demand in these areas for high-priced, better quality cement, Bangur said.
Shree Cement has strategically positioned itself in the market, offering superior quality cement at competitive prices. In the second quarter, the company's sales of premium products rose to 9.5% of the total trade sales, compared to 7.5% in the previous year.
Bangur predicts a growth of more than 20% in absolute EBITDA for the second half of the year.
"As sales will be higher, costs are down, and prices are good, we anticipate over 20% EBITDA growth in absolute terms in the second half," he said.
On November 7, the cement maker reported around 159% year-on-year (YoY) jump in standalone net profit to ₹491.3 crore for the second quarter from ₹190 crore last year.
The company's standalone revenue from operations increased over 21% to ₹4,585 crore against ₹3,781 crore in the corresponding period of the preceding fiscal. EBITDA margin shot up to 19% from 13.85% a year ago.
Bangur also shared updates on the company's ongoing brownfield and greenfield expansions.
"We are occupied until 2027-2028. Currently we are at 48 million tonnes; we will reach 71 million tonnes by March 2027 and 80 million tonnes by 2028. Until then, we can't take on more projects. Our focus is on our existing greenfield and brownfield units."
Shree Cement company has a market capitalisation of ₹97,438 crore. The company's shares have gained around 7% in a month, mirroring the Nifty 50 returns. The company competes with cement makers such as Ambuja Cements, ACC, India Cements, and Dalmia Bharat.
In September, Nomura upgraded Shree Cement to a ‘buy’ from ‘reduce’ while raising the target price on the stock to ₹28,700 per share from ₹20,400.
(Edited by : Shweta Mungre)
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