Shree Cements Shares Q3 Results

Shree Cements

Corporate Action
by 5paisa Research Team Last Updated: 2022-08-08T18:46:27+05:30

The news has been common across cement companies and Shree Cements has been no exception. The sharp spike in power and fuel costs has resulted in Shree Cements seeing a sharp fall in the operating profits during the quarter. Top line demand also took a hit on account of restrictions placed in the light of the Omicron variant during the month of November and December 2021.


Here is a Gist of Shree Cements Financial Numbers
 

Rs in Crore

Dec-21

Dec-20

YOY

Sep-21

QOQ

Total Income (Rs cr)

₹ 3,637.11

₹ 3,557.21

2.25%

₹ 3,373.38

7.82%

EBITDA (Rs cr)

₹ 559.90

₹ 804.15

-30.37%

₹ 630.63

-11.22%

Net Profit (Rs cr)

₹ 481.97

₹ 630.87

-23.60%

₹ 562.83

-14.37%

Diluted EPS (Rs)

₹ 133.56

₹ 174.85

 

₹ 155.59

 

EBITDA Margin

15.39%

22.61%

 

18.69%

 

Net Margins

13.25%

17.73%

 

16.68%

 

 

For the Dec-21 quarter, Shree Cements reported 2.25% higher sales at Rs.3,637.11 crore on a YoY consolidated basis. During the December 2021 quarter, Shree Cements saw sales growth tapering on account of the Omicron related restrictions on the construction sector. This was more prominent in the Delhi NCR region and other parts of North India.

The company has, meanwhile, commenced commercial production at its clinker grinding unit at the Village Patas in Pune district. On a sequential basis, the revenues were up by 7.82%, but growth is still tepid. For the fiscal year 2021-22, the company has declared an interim dividend of Rs.45 per share, which was approved at the board meet.

Let us turn to the operating performance of Shree Cements. For the Dec-21 quarter, the operating profits were down -30.37% yoy at Rs.560 crore and this was largely on account of higher costs in the quarter. In fact, the EBIT of Shree Cements came under pressure due to a sharp spike in operating costs, especially the cost allocation to power and coal. For instance, the power and fuel expenses in the latest quarter was up by 39.5% at Rs.914 crore.

Cost of materials or the raw inputs including coking coal, was also 15% higher yoy while the transport and freight costs trended lower, with fuel prices subsiding after the government cut the levies at a central and at a state level. Operating margins were sharply lower from 22.61% in Dec-20 quarter to 15.39% in the Dec-21 quarter. Operating margins were also much lower on a sequential basis compared to the Sep-21 quarter.

Now let us turn to the bottom line. The net profits for the Dec-21 quarter were also down -23.6% yoy at Rs.482 crore. This was largely because the operating pressures got transmitted to the bottom line. However, it must be noted that the fall in net profits was lower than the fall in operating profits due to lower tax burden in the current quarter.

The PAT margins for the Dec-21 quarter tapered from 17.73% to 13.25% on a year on year basis. Similarly, the PAT margins were also lower on a sequential basis as compared to Sep-21 quarter. Overall, it was a tough quarter for Shree Cements in terms of top line and bottom line and profits came under pressure in the quarter.


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