SHREE CEMENT LIMITED (SHREECEM)

Summary Links:

* Summaries created by AI. Please verify by checking the actual call transcript.

Summary from August 2024

Conference Call Overview • Date: August 7, 2024 • Hosted by: PhillipCapital India Private Limited • Key Participants: • Neeraj Akhoury (Managing Director) • Subhash Jajoo (Chief Finance Officer) • Vaibhav Agarwal (Moderator)

Financial HighlightsMarket Conditions: Challenging due to sluggish demand from elections and extreme weather. • Production: • Total volume increased by 8% (from 8.92 million tons to 9.64 million tons). • Average realization per ton decreased by 6% to INR 4,469. • EBITDA: Slight decline of 2% to INR 916 crores; EBITDA per ton fell to INR 950.

Expansion and Sustainability Initiatives • New integrated cement unit commissioned in Andhra Pradesh. • Ongoing expansion projects totaling 15 million tons. • Achieved 1 gigawatt of installed power capacity, focusing on renewable energy. • Investments in alternative fuels and water conservation.

Regional PerformanceCapacity: Expanded to 56.4 million tons. • Sales Trends: • Increased sales in the East; challenges in the North due to competition. • Regional realizations: • North: INR 4,641 • East: INR 4,154 • South: INR 4,620 • Concerns about Northeast sales due to Bangladesh turmoil were addressed.

Financial Guidance and Analyst InquiriesDepreciation: Increase due to capitalized assets, not rates. • Cash Profits Focus: Emphasis on cash EPS stability despite challenges. • Nawalgarh Plant: Limited sales to Rajasthan; future expansion expected with Etah grinding unit. • Fuel and Power Costs: Potential decreases in fuel costs; increased renewable energy usage anticipated by mid-2025.

Market OutlookQ2 Predictions: Challenging due to low demand; hope for improvement in Q4. • Industry Dynamics: Ongoing consolidation may lead to short-term pricing pressures. • Capacity and Demand: Current capacity at 450 million tons; projected demand growth of 7.5% to 8%.

Conclusion • The call concluded with thanks from the moderator and closing remarks, emphasizing the company's long-term vision amidst short-term fluctuations.

Summary from May 2024

Shree Cement Limited Q4 FY '24 Earnings Conference Call Summary

Key HighlightsDate of Call: May 15, 2024 • Submission: Transcript submitted to National Stock Exchange of India and BSE Ltd on May 21, 2024. • Management Present: Neeraj Akhoury (Managing Director), Ashok Bhandari (Managing Director), Subhash Jajoo, Amit Murarka, Sumangal Nevatia, Indrajit Agarwal, Prateek Kumar, Raashi Chopra, Jashandeep Singh, Rajesh Kumar Ravi, Rahul Gupta.

Financial PerformanceSales Growth: 12% increase, totaling 35.5 million tons. • Capacity Utilization: Improved from 70% to 77%. • Operational EBITDA: Increased by 48% to INR 4,364 crores. • Net Profit: Highest-ever reported.

Expansion and SustainabilityNew Projects: 3 million-ton plant in Guntur. • Sustainability Goals: Aim for 100% renewable energy by 2050. • Ready-Mix Concrete (RMC): Expanding business with a target of INR 100 crores annually for two years.

Management InsightsCapacity Growth: 17% increase in capacity outpacing 7% CAGR in cement consumption since 2001. • Conservative Capital Allocation: Resulted in a 24.4% internal rate of return since 1985. • Organic Growth Strategy: Plans to grow capacity to 62 million tons this financial year.

Investor Concerns AddressedVolume Growth: 8% increase noted; competitors achieving double-digit growth. • Freight Cost Savings: Shift from 88% road to 25% rail transport could yield 10-12% cost savings. • Cash Management: Emphasis on maintaining liquidity for limestone auctions.

Future ProjectionsCapacity Expansion: Target of 62 million tons by March, potentially extending to 65 million. • RMC Revenue Expectations: Stabilization period of 6-8 months; minimal impact on overall results. • Premium Cement Segment: Bangur brand launch projected to account for 12-15% of total sales.

Pricing and Cost ManagementPricing Trends: 5-6% quarter-over-quarter decline; influenced by demand-supply dynamics. • Coal Inventory: Current stock sufficient for about four months of consumption. • Cost Reductions: Primarily due to decreased coal costs and deferred marketing expenses.

Closing RemarksCommitment to Shareholders: Aim to exceed expectations and address concerns raised during the call. • Next Steps: Invitation for further engagement in the next quarter.

Summary from February 2024

Shree Cement Limited Q3 FY '24 Earnings Conference Call Summary

Key HighlightsDate of Call: January 31, 2024 • Submission: Transcript submitted to National Stock Exchange and BSE on February 6, 2024. • Management Present: Neeraj Akhoury (Managing Director), Ashok Bhandari, Prateek Kumar.

Financial PerformanceSales Volume: Increased by 11% year-over-year. • EBITDA: Rose by 74% to INR 1,234 crores. • Future Projections: Anticipated growth to 40 million tons by March 2025, exceeding industry growth rates of 8-10%.

Strategic InitiativesNew Plant Launch: Successful launch in Rajasthan. • Brand Strategy: Focus on enhancing brand awareness, targeting over 50% top-of-mind awareness for premium product, Magna. • Capacity Expansion: Plans for further capacity expansion and energy efficiency improvements.

Cost ManagementPower and Fuel Costs: Declined to INR 1.78 per kCal; expected stability in the short term. • Capital Expenditures: Estimated INR 12,500 crores needed by 2027, with INR 6,000 crores available in cash.

Logistics and OperationsLogistics Initiatives: Aiming for 80-90% self-reliance by March 2027. • Current Logistics Cost Outlook: Stable, with a cash position of INR 6,000 crores as of December 31.

Q&A HighlightsDepreciation: Decreased from INR 1,104 crores to INR 986 crores due to new production at Nawalgarh. • Geographical Sales Mix: 60% North, 28-29% East, 12% South. • Freight Costs: Decreased from 472 km to 448 km; potential for further reductions with new grinding units. • Renewable Energy: Current capacity includes 33 MW waste heat recovery and 40 MW solar; plans to add 133 MW next year.

Branding and Product StrategyPremium Product Percentage: Currently over 9%, targeting 15% for FY '25. • Brand Equity: Emphasis on quality improvements without increasing costs.

Conclusion • The call concluded with appreciation for participant engagement and a commitment to transparency regarding significant developments.

Summary from November 2023

Shree Cement Limited Q2 FY '24 Earnings Conference Call Summary

Key HighlightsDate of Call: November 8, 2023 • Submission Date: November 14, 2023 • Management Present: Chairman H.M. Bangur, Managing Director Neeraj Akhoury

Financial PerformanceProduction Increase: 11% compared to H1 FY23 • Sales Growth: 14% increase • Net Profit: INR 1,072 crores (up from INR 505 crores YoY) • Cement Realization: Improved to INR 4,843 per ton

Capacity Expansion PlansTarget Capacity: • 56 million tons by 2024 • 80 million tons by 2028 • Green Power Usage: Increased to 58%, aiming for 62% by June 2024

Management InsightsMarket Challenges: High handling costs at Indian ports • Tax Strategy: Conservative approach leading to refunds in subsequent years • Production Mix: 75% blended cement, 80% trade sales

Cost ManagementPower and Fuel Costs: Fluctuations based on sales and fuel price bookings • Raw Material Costs: Decrease due to lower prices for gypsum and fly ash

Regional InsightsClinker Production: 5.96 million tons for the quarter, 30% YoY increase • Utilization Rates: 71% for the quarter, affected by demand fluctuations and new capacity

Future OutlookNew Capacity Timelines: • Guntur plant expected completion by early 2024 • Additional units in Rajasthan and Punjab to follow • Profitability Expectations: Improvement in East market profitability anticipated

Competitive EdgeRenewable Energy Usage: Currently at 58%, aiming for 62%-63% • Cost Management: Emphasis on premium pricing over volume growth

Conclusion • Positive remarks on performance and future outlook, with expectations of improved prices and decreased costs in the next quarter.

Summary from August 2023

Shree Cement Limited Q1 FY2024 Earnings Conference Call Summary

Key HighlightsDate of Call: July 27, 2023 • Submission Date: August 1, 2023 • Challenges Addressed: • Income Tax Department survey • Notice from Ministry of Corporate Affairs

Operational PerformanceSales Volume: Increased by 19% to 8.9 million tons • EBITDA: Rose by 14% to Rs. 933 crores • Price Realization: Decreased by 4%

Expansion PlansCAPEX: Approximately Rs. 7,000 crores for capacity expansion • Targeting total capacity of 68 million tons • Focus on Rajasthan, Uttar Pradesh, and Karnataka • New Ventures: Diversifying into ready-mix concrete (RMC)

Market OutlookDemand Projections: Optimistic about strong cement demand due to government infrastructure spending • Growth Strategy: Aiming for double-digit growth in FY2024

Regional FocusUtilization Levels: Improved across all regions, with East nearing full capacity • Clinker Sourcing: Plans to source from various locations, including Rajasthan

Investor EngagementQ&A Session: Indicated strong investor interest in growth strategy • Transparency Commitment: Plans to enhance financial reporting transparency

Financial InsightsCoal Costs: Decrease in coal costs per CV from previous quarter • Depreciation: Expected to be around ₹2000 crores annually • Incentive Structure: Projected to remain around ₹130-140 crores

Future DevelopmentsNew Products: Launching OPC 53 grade cement • Energy Management: Commitment to managing energy consumption and optimizing operations

Closing RemarksCommitment to Governance: Emphasis on professional management and corporate governance • Stakeholder Communication: Encouraged further communication for clarifications and updates

Summary from May 2023

Conference Call Overview • Date: May 23, 2023 • Hosts: ICICI Securities • Participants: Neeraj Akhoury (Managing Director), Subhash Jajoo (CFO) • Transcript submitted to National Stock Exchange of India and Bombay Stock Exchange on May 27, 2023.

Financial Performance HighlightsFiscal Year 2022-2023: • 15% volume growth. • 55% share of green power in operations. • Q4 2023 Results: • Sales volume increased by 10% to 9 million tonnes. • Capacity utilization rose from 71% to 78%. • EBITDA declined by 19% due to rising costs, but profitability improved in the latter part of the year.

Strategic Focus • Commitment to sustainability and enhancing product offerings. • Emphasis on digitalization and logistics capabilities. • Anticipation of continued demand growth in FY2024 driven by government spending and housing demand.

Q&A Session InsightsFuel Costs: • Significant decrease in petcoke prices expected to lower overall fuel costs. • 76% of fuel mix in Q4 was petcoke. • Growth Strategy: • Focus on organic growth with potential for strategic acquisitions. • Aim to increase premium product share from 7.5% to 15%. • Debt and Capital Expenditure: • Company maintains a net cash position; plans to fund capex through internal accruals. • Volume and Capacity Expansion: • Target of 36 million tonnes for FY2023, above market estimates. • Introduction of premium products in the northern region.

Market and Pricing Strategy • Aim to maintain price line while increasing volume. • Focus on premium products to strengthen pricing. • Exploration of various avenues for performance enhancement beyond premiumization.

Additional Inquiries • Concerns about inventory strategy amid fluctuating coal prices. • Updates on cement realizations and capacity utilization. • Clarification on the contribution of the power business to total revenue.

Closing Remarks • Neeraj Akhoury reassured stakeholders of the company's commitment to performance and targets, thanking participants for their engagement.

Summary from February 2023

Financial PerformanceSales Growth: 23% increase in cement and clinker sales, totaling approximately 8.03 million tons. • EBITDA: Declined by 14% to INR 708 crores, but EBITDA per ton improved to INR 881. • Capex: INR 2,200 crores spent in the first nine months, with a projected total of INR 2,900 crores for the fiscal year.

Market OutlookDemand Growth: Anticipated strong demand due to upcoming elections and government infrastructure investments. • Supply vs. Demand: Expected demand growth of 6% to 8%, with supply growth lagging at 3% to 4%.

Strategic PrioritiesCapacity Expansion: Aiming for 80 million tons capacity by 2030, focusing on organic growth. • Sustainability Commitment: 53% green power consumption, 5x water positive status, and A- score in carbon disclosure.

Operational InsightsPricing Stability: Stable pricing since December, slight reduction in fuel costs. • Regional Performance: Clinker utilization rates at 73% in North and East, 62% in South.

Challenges and InitiativesCost Management: Plans to increase rail dispatches and use of waste materials to maintain cost advantages. • Market Competition: Concerns about potential downward pressure on cement prices due to new capacity additions.

Future PlansProduct Development: Focus on launching unique cement products based on consumer research. • Cash Utilization: Strong cash reserves to support aggressive capital expenditure for growth.

Closing RemarksCommitment to Growth: Emphasis on maintaining reputation as a fast-growing, environmentally friendly, and innovative leader in the industry.