Shree Cement’s Q3 FY26 earnings call emphasized a continued strategic focus on value over volume, successfully narrowing the realization gap with peers like UltraTech from INR30 to INR15 per bag. Management confirmed a strong pipeline for Ready Mix Concrete (RMC) expansion, aiming to increase plants from 19 to 45 by September 2026. Outlook remains bullish on sustained pricing, while the company manages capacity utilization around mid-50%, expecting better utilization as RMC contribution grows.
Q3 FY26 Performance Context
In the conference call held on February 06, 2026, management addressed investor queries following the release of financial results for the quarter ending December 31, 2025. Mr. Ashok Bhandari, Senior Advisor, reiterated the company’s deliberate strategy implemented since October 2024 to prioritize absolute earnings by concentrating on value rather than pure volume.
Realization and Pricing Strategy
A key focus was the successful narrowing of the price gap against competitors. Mr. Bhandari noted that restraining volumes allowed the company to narrow the price gap from approximately INR30 per bag to INR15 per bag against UltraTech. While sales volume dipped in the September quarter (7.9 million tons) compared to the December quarter (8.7 million tons), management attributed December’s uplift to additional demand, with January tracking similarly.
For the December 2025 quarter, the per-ton realization was reported at INR 4,652, compared to INR 4,554 in December 2024. Management expressed confidence in maintaining this discipline, expecting the realized prices to remain strong, especially as the company is bullish on the cement sector outlook.
Ready Mix Concrete (RMC) Expansion
The expansion of the RMC business was highlighted as crucial for improving overall capacity utilization and optimizing logistics. As of the call date, Shree Cement operated 19 commercial RMC plants. The plan is aggressive: to increase this to 45 plants within the next 6 to 8 months (by September 2026). RMC sales for the quarter stood at INR 71 crores, utilizing 45% of its required cement captive consumption.
Capacity Utilization and Future Growth
Current operating rates were noted to be around the mid-50% utilization mark. Management confirmed that capacity expansion plans (targeting 80 MT by FY’29) are entirely dependent on demand realization in FY’26 and FY’27, emphasizing the need to invest capital productively rather than setting up capacity for idle utilization. The company aims for an ideal utilization of around 70%.
Capex and Financial Visibility
For FY 2025-26, the expected Capex was approximately INR 2,000 crores, with INR 1,500 crores already spent. For the next financial year (FY’27), visibility is provided for approximately INR 400 to INR 500 crores. This includes about INR 200 crores for RMC plants (targeting 30 more), INR 200 crores for railway sidings, and INR 50 to INR 100 crores for routine Capex. The company remains net debt free with about INR 6,000 crores of free cash.
Operational Metrics
- Road-Rail Mix: 88% rail and 12% road for the quarter.
- Fuel Mix: 76% petcoke, 6% coal, with the remainder being alternative fuels. Per kilocalorie cost was reported at 1.56, noted as industry-lowest.
- Depreciation Estimate: Projected depreciation cost for the next year is approximately INR 1,600 crores.
- Trade vs. Non-Trade: Trade sale was 65%, with non-trade volumes temporarily high due to government budget expenditure needs, expected to normalize back to a 75-25 level going forward.
Source: BSE
