Shree Cement Q2 FY27: Volume Rises 18%, Margin Falls

Quarterly results at a glance

Shree Cement reported mixed operating trends for the quarter ended September 30, 2026, or Q2 FY27. India sales volume rose about 18% year-on-year to 9.31 million tonnes, supported by improved capacity utilisation. Consolidated sales volume increased about 14% to 10.52 million tonnes. However, higher fuel costs affected profitability per tonne despite the increase in volumes. Consolidated EBITDA rose about 4% year-on-year to ₹1,016 crore, but EBITDA per tonne declined to ₹966 from ₹1,055. Revenue stood at ₹5,896.51 crore, down 5.40% sequentially from ₹6,233.13 crore. The company discussed the quarterly performance in its earnings call hosted by ICICI Securities on October 23, 2026.

India volume growth leads the operating performance

India sales volume rose to 9.31 million tonnes in Q2 FY27 from 7.91 million tonnes in the corresponding quarter a year earlier. The increase of about 18% was the central positive feature of the quarter. Management linked the improvement to its continued focus on volumes and better capacity utilisation in India. India capacity utilisation rose to 56%, compared with 52% in the year-ago quarter. Higher utilisation can support the absorption of fixed operating costs, although the company’s per-tonne profitability was pressured by fuel costs during the quarter. The reported volume growth also followed the company’s expansion of its operating base over the past three years.

Consolidated volumes rise 14% year-on-year

Consolidated sales volumes grew to 10.52 million tonnes from 9.23 million tonnes a year earlier, an increase of about 14%. Consolidated performance includes the company’s operations beyond India. The gap between India and consolidated volume growth reflects the different bases and operational mix across the business. The company reported that volume gains were accompanied by a modest change in selling realisations. The year-on-year operating numbers show that Shree Cement sold more material in the quarter, even as cost pressures limited the gain in operating profit. This distinction is important when assessing a cement producer, where revenue growth and profit per tonne can move differently.

Realisations improve marginally from last year

India realisations were ₹4,870 per tonne in Q2 FY27, compared with ₹4,840 per tonne in the year-ago period. This represents a marginal improvement of about 1% year-on-year. The limited increase indicates that pricing did not rise at the same pace as volume growth. In a sector with significant energy and logistics costs, small movements in realisation can materially affect margins when costs increase. Shree Cement’s results therefore show volume growth supported by only a modest improvement in average realisation. The company did not provide further pricing details in the supplied earnings-call extract.

Higher fuel cost reduces EBITDA per tonne

Consolidated EBITDA increased to ₹1,016 crore from ₹974 crore in the year-ago quarter, a rise of about 4%. But consolidated EBITDA per tonne fell to ₹966 from ₹1,055. Management attributed the decline in EBITDA per tonne primarily to higher fuel costs. The figures show that the absolute operating profit increased, but at a much slower rate than sales volume. This led to lower operating profit earned on each tonne sold. Fuel is a significant input cost for cement manufacturers, making changes in fuel expenses relevant to quarterly margin performance. The quarter consequently combined stronger physical sales with weaker unit economics.

Sequential comparison reflects seasonal trends

Management said the sequential decline from Q1 FY27 was consistent with the seasonality of the period. India sales volume fell 11% from 10.49 million tonnes in the previous quarter to 9.31 million tonnes. Consolidated sales volume declined 8% from 11.45 million tonnes to 10.52 million tonnes. India realisation was 1% lower sequentially at ₹4,870 per tonne, compared with ₹4,919 per tonne in Q1 FY27. Consolidated EBITDA declined from ₹1,272 crore to ₹1,016 crore. EBITDA per tonne fell from ₹1,111 to ₹966 over the same period.

Key Q2 FY27 operating metrics

Revenue declines sequentially

Quarterly revenue of ₹5,896.51 crore was 5.40% lower than ₹6,233.13 crore in Q1 FY27. The decline aligns with the sequential reduction in India and consolidated volumes, along with the 1% sequential decline in India realisation. Revenue figures should be considered alongside the seasonal context cited by management. The company’s year-on-year volume growth indicates a higher level of activity than the same quarter last year, while the quarter-on-quarter comparison captures the softer progression from Q1. The supplied material does not state year-on-year revenue for Q2 FY27.

UAE operations and capacity context

During the call, Managing Director Neeraj Akhoury said demand in the UAE was robust, supported by projects including the new Dubai airport. He said converting clinker into cement in the UAE made sense and noted that the coastal plant could produce specialised products such as oil well cement for export. For India, he said organically built plants generally take about three years to reach full utilisation. He also said volumes had increased from about 24-25 million tonnes to about 40-42 million tonnes over three years. These comments provide context for the company’s focus on ramping up recently built capacity and improving utilisation.

What the results mean for investors

Shree Cement’s Q2 FY27 numbers underline the difference between volume-led growth and margin performance. The company delivered higher India and consolidated sales volumes on a year-on-year basis, while capacity utilisation in India improved. Yet fuel-cost pressure lowered EBITDA per tonne both year-on-year and sequentially. The 5.40% sequential revenue decline was accompanied by lower sales volumes, lower realisation and lower consolidated EBITDA than in Q1 FY27. Investors tracking the company will therefore assess future updates on fuel costs, realisations, utilisation and volume progression. The next set of reported results and management commentary will provide further evidence on these operating factors.

Conclusion

Shree Cement closed Q2 FY27 with strong year-on-year volume growth but lower profitability per tonne due to higher fuel costs. Its India capacity utilisation improved, while sequential performance moderated in a seasonally softer quarter. Management’s comments highlighted capacity ramp-up in India and demand opportunities in the UAE as continuing operational themes.