India's Shree Cement tops Q3 profit view on lower fuel costs, higher volume

Shree Cement

31/01/2024 11:58

BENGALURU, Jan 31 (Reuters) - Shree Cement  SHCM.NS ,
India's third-biggest cement company by market capitalisation,
reported a bigger-than-expected third-quarter profit on
Wednesday, driven by increased volume and easing fuel prices.
    Cement companies have been reporting substantial profit
growth over the past couple of quarters, led by the housing and
infrastructure push by the Indian government ahead of this
year's general elections.
    The company's profit nearly tripled from the previous year
to 7.34 billion rupees ($88.4 million) for the three months
ended Dec. 31, topping analysts' average estimate of 5.80
billion rupees, according to LSEG data.
    "Strong volume growth, building premium products, and
softening of fuel prices have helped us deliver a robust
improvement," Managing Director Neeraj Akhoury said in a
statement.    
    Power and fuel costs, constituting nearly a third of total
expenses, declined 5%. Its total sales volume climbed 10.7% to
8.89 million tons.        
    In fiscal 2024, the top four cement makers by market cap,
barring market leader UltraTech Cement  ULTC.NS , have reported
double-digit profit growth in each of the three quarters.
UltraTech reported a single-digit growth in the June quarter.   
    Shree Cement's gross revenue from operations surged 19.3%
from a year earlier to 62.02 billion rupees.
    Analysts at Elara Capital anticipate strong volume growth
for the sector in the fourth quarter, citing the beginning of
the busy construction season and increased pre-election
government spending.
    Earlier this month, market leader UltraTech Cement beat
profit estimates, driven by robust demand and price increases.
    Shares of Shree Cement closed 1.7% higher ahead of the
results.
        
 
($1 = 83.0180 Indian rupees)

 (Reporting by Ashish Chandra in Bengaluru; Editing by Dhanya
Ann Thoppil)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))