Shree Cement Revises 80 MTPA Target to FY29, Posts 198% Profit Jump

Introduction

Shree Cement Ltd, a prominent player in the Indian cement industry, has announced a strategic revision of its capacity expansion timeline, now targeting a production capacity of 80 million tonnes per annum (MTPA) by the financial year 2029. This adjustment comes as the company reported an exceptionally strong financial performance for the second quarter of FY26, highlighted by a 198% year-on-year increase in net profit. The move reflects a calibrated approach to growth, aligning expansion with evolving market dynamics while maintaining robust profitability.

A Recalibrated Expansion Roadmap

Under its updated strategic plan, Shree Cement is phasing its expansion to better match market demand and ensure optimal resource utilization. The company now aims to achieve a capacity between 72 and 75 MTPA by FY27, before reaching its ultimate goal of 80 MTPA by FY29. This measured pace is designed to support sustainable growth and strengthen its market leadership. To complement this, the company recently commissioned a new clinkerisation unit with a capacity of 3.65 MTPA at its integrated plant in Beawar, Rajasthan, reinforcing its commitment to enhancing production capabilities.

Strategic Foray into Ready-Mix Concrete

In a significant diversification effort, Shree Cement has aggressively entered the Ready-Mix Concrete (RMC) market. The company plans to establish 40 RMC plants by FY28, aiming to become a multi-product player in the construction materials sector. This initiative has already gained momentum with the commissioning of its first greenfield RMC plant in Hyderabad and the strategic acquisition of five operational plants from StarCrete LLP in the Mumbai Metropolitan Region for ₹33.5 crore. These moves have increased its combined RMC capacity to 512 cubic metres per hour, providing a strong foothold in key urban markets.

Stellar Q2 FY26 Financial Performance

Shree Cement delivered a robust financial performance in the quarter ending September 2025, driven by higher sales realizations and improved cost efficiencies. The company's focus on profitability is evident in its impressive growth metrics compared to the same period last year.

These results underscore the company's operational excellence and successful market strategies.

Operational Strength and Premiumization

The company's operational performance remained strong, with cement sales volume growing by 6.8% year-on-year in Q2 FY26. A key driver of improved profitability has been the successful execution of its premiumization strategy. The contribution of premium products to the total trade volume increased significantly to 21.1%, up from 14.9% in the corresponding quarter of the previous year. This shift towards higher-margin products has positively impacted the company's bottom line.

Capital Allocation and Shareholder Value

Reflecting its strong financial position and disciplined approach to capital allocation, Shree Cement has outlined significant investments for future growth. The company has planned a capital expenditure of ₹3,000 crore for FY27 to fund its expansion projects. Demonstrating its commitment to shareholder returns, the board has also announced an interim dividend of ₹80 per share. These actions are supported by a healthy cash position and a focus on creating long-term value.

Positive Market Outlook

Shree Cement maintains an optimistic outlook on future cement demand in India. This confidence is supported by several positive macroeconomic and sector-specific factors. An above-normal monsoon, strong kharif sowing, and adequate reservoir levels are expected to boost rural liquidity and demand. Furthermore, steady employment conditions, controlled inflation, and a recent rationalization of GST rates are anticipated to stimulate activity in the infrastructure and housing sectors, providing a favorable environment for growth.

Conclusion

Shree Cement's revised expansion strategy, coupled with its outstanding Q2 performance and strategic diversification into the RMC segment, demonstrates its agility and foresight. By balancing ambitious growth targets with market realities and focusing on profitability, premiumization, and efficiency, the company is solidifying its position as a leader in India's cement industry. With strong demand drivers on the horizon, Shree Cement is well-equipped to navigate the dynamic market and continue its trajectory of sustainable growth.