* Summaries created by AI. Please verify by checking the actual call transcript.
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 Highlights • Market 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 Performance • Capacity: 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 Inquiries • Depreciation: 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 Outlook • Q2 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.
Shree Cement Limited Q4 FY '24 Earnings Conference Call Summary
Key Highlights • Date 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 Performance • Sales 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 Sustainability • New 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 Insights • Capacity 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 Addressed • Volume 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 Projections • Capacity 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 Management • Pricing 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 Remarks • Commitment to Shareholders: Aim to exceed expectations and address concerns raised during the call. • Next Steps: Invitation for further engagement in the next quarter.
Shree Cement Limited Q3 FY '24 Earnings Conference Call Summary
Key Highlights • Date 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 Performance • Sales 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 Initiatives • New 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 Management • Power 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 Operations • Logistics 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 Highlights • Depreciation: 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 Strategy • Premium 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.
Shree Cement Limited Q2 FY '24 Earnings Conference Call Summary
Key Highlights • Date of Call: November 8, 2023 • Submission Date: November 14, 2023 • Management Present: Chairman H.M. Bangur, Managing Director Neeraj Akhoury
Financial Performance • Production 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 Plans • Target Capacity: • 56 million tons by 2024 • 80 million tons by 2028 • Green Power Usage: Increased to 58%, aiming for 62% by June 2024
Management Insights • Market 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 Management • Power 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 Insights • Clinker 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 Outlook • New 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 Edge • Renewable 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.
Shree Cement Limited Q1 FY2024 Earnings Conference Call Summary
Key Highlights • Date of Call: July 27, 2023 • Submission Date: August 1, 2023 • Challenges Addressed: • Income Tax Department survey • Notice from Ministry of Corporate Affairs
Operational Performance • Sales Volume: Increased by 19% to 8.9 million tons • EBITDA: Rose by 14% to Rs. 933 crores • Price Realization: Decreased by 4%
Expansion Plans • CAPEX: 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 Outlook • Demand Projections: Optimistic about strong cement demand due to government infrastructure spending • Growth Strategy: Aiming for double-digit growth in FY2024
Regional Focus • Utilization Levels: Improved across all regions, with East nearing full capacity • Clinker Sourcing: Plans to source from various locations, including Rajasthan
Investor Engagement • Q&A Session: Indicated strong investor interest in growth strategy • Transparency Commitment: Plans to enhance financial reporting transparency
Financial Insights • Coal 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 Developments • New Products: Launching OPC 53 grade cement • Energy Management: Commitment to managing energy consumption and optimizing operations
Closing Remarks • Commitment to Governance: Emphasis on professional management and corporate governance • Stakeholder Communication: Encouraged further communication for clarifications and updates
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 Highlights • Fiscal 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 Insights • Fuel 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.
Financial Performance • Sales 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 Outlook • Demand 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 Priorities • Capacity 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 Insights • Pricing 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 Initiatives • Cost 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 Plans • Product Development: Focus on launching unique cement products based on consumer research. • Cash Utilization: Strong cash reserves to support aggressive capital expenditure for growth.
Closing Remarks • Commitment to Growth: Emphasis on maintaining reputation as a fast-growing, environmentally friendly, and innovative leader in the industry.