Shree Cement Q1 FY27 Results (NSE: SHREECEM)
Signal: Margin pressure
The read
Revenue growth accelerated to 18% YoY (vs 2-5% in the prior four quarters), signalling strong volume momentum, but margin compression of 300bps YoY on rising power/fuel and freight costs remains the dominant story. PAT fell 17.5% YoY, though the sequential PAT was flat, suggesting margins may stabilise near current levels.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹6,233.13 Cr | 18.0% | 2.2% |
| EBIT | ₹741.09 Cr | -14.7% | |
| Net profit | ₹531.12 Cr | -17.5% | |
| EPS | ₹146.67 | -17.6% | |
| EBIT margin | 23.8% |
P&L walk
Revenue grew 18% YoY driven by volume, but costs rose faster: power & fuel (26.4% of rev, +180bps), freight (23.0%, +130bps), and raw materials (11.8%, +200bps) compressed EBITDA margin by 300bps YoY to 23.8%. Higher other income (₹211.7 Cr vs ₹235.2 Cr YoY) and lower tax (₹210 Cr vs ₹225 Cr) partially offset, but PAT still fell 17.5% YoY. Operating leverage absent as fixed costs (employee + D&A) grew 11% vs 18% revenue growth, but margin contraction was input-cost driven.
Key positives
- Consolidated revenue grew 18.0% YoY, the strongest growth in five quarters, driven by volume recovery.
- Net worth improved to ₹23,787 Cr, up 7.2% YoY; debt-equity remains low at 0.07x.
- Other income remained robust at ₹211.7 Cr, providing a buffer to operating earnings.
Key concerns
- EBITDA margin contracted 300bps YoY to 23.8%, with power & fuel (26.4% of rev, +180bps) and freight (23.0%, +130bps) the main drags.
- Cost of materials consumed as % of revenue rose 200bps YoY to 11.8%, indicating input cost inflation or less favourable mix.
- PAT declined 17.5% YoY despite 18% revenue growth, underscoring the margin pressure.
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