Shree Cement Q2 FY27 Results Analysis: PAT Falls 15%, Fuel Costs Surge 56% (SHREECEM)
Shree Cement Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 5,896.51 Cr (+23.85% YoY) and PAT growth of -15.13% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 23, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 5,896.51 Cr (+23.85% YoY) |
| PAT (Q2) | Rs. 261.82 Cr (-15.13% YoY) |
| EBITDA margin | 17.24% (-322 bps YoY) |
| EPS (Q2) | Rs. 72.56 (-15.15% YoY) |
| Market cap | Rs. 82,029.58 Cr |
| CMP | Rs. 22,735.00 |
Quarter Snapshot
Shree Cement delivered 23.85% YoY revenue growth but the weakest profitability of the visible quarters: operational EBITDA margin fell 322 bps YoY to 17.24% and owners' PAT declined 15.13% YoY, driven almost entirely by power and fuel costs rising 55.67% YoY. Management's 'healthier profit from Q2 FY27' guidance was missed, pushing the entire recovery burden onto the seasonally stronger H2, while working capital deteriorated (inventories +30.52% YTD) and H1 free cash flow turned negative at −Rs.95.50 Cr. The balance sheet remains a fortress at 0.08x debt-equity and overseas subsidiaries returned to profit (Rs.114.42 Cr in Q2), but the fuel-cost shock remains unresolved.
Key Investment Insights
Key Positives
- Consolidated revenue grew 23.85% YoY to Rs.5,896.51 Cr
- Overseas subsidiaries returned to profit: four unreviewed overseas subsidiaries posted Q2 net profit of Rs.114.42 Cr (H1 Rs.251.26 Cr) after the war-disrupted Q1
- Subsidiaries contributed Rs.56.49 Cr, 21.58% of consolidated owners' PAT
- Balance sheet remains strong: debt-equity of 0.08, current ratio 2.03, net worth Rs.23,862.41 Cr
- H1 capex of Rs.894.66 Cr is 59.64% of the FY27 Rs.1,500 Cr guidance — on track
- Effective tax rate of 28.26% (Q2) and 28.31% (H1) tracking the ~30% guidance
- Freight (−194 bps), employee (−53 bps) and other expenses (−64 bps) all improved as ratios YoY; depreciation fell 211 bps as a ratio
Risk Factors
- Owners' PAT fell 15.13% YoY and 50.52% QoQ to Rs.261.82 Cr despite 23.85% revenue growth
- Operational EBITDA margin compressed to 17.24% (−322 bps YoY, −317 bps QoQ), the lowest of the visible quarters
- Power and fuel costs rose 55.67% YoY, absorbing 639 bps more of revenue (31.26% vs 24.87%)
- Management's 'healthier profit from Q2 FY27' guidance was missed; the recovery is now deferred entirely to H2 with H1 owners' PAT down 16.84% YoY
- Inventory build of Rs.97.14 Cr absorbed margin (produced > sold) vs a Rs.33.20 Cr drawdown a year ago
- Working capital deteriorated: inventories +30.52% YTD, receivables +21.31% YTD; CFO/EBITDA at 0.31x and H1 FCF negative at −Rs.95.50 Cr
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.