Shree Cement Q2 Result: As input costs rise, profit declines 67% year over year to Rs 189 crore.

On October 14, Shree Cement Limited reported a 67 percent decline in standalone net profit for the second quarter of FY23, coming in at Rs 189 crore as opposed to Rs 578 crore the prior year. Sequentially, the profit decreased by 40% from the previous quarter’s Rs 316 crore earned.

In addition to better realisations, the company was able to increase its volumes during the quarter compared to last year, which contributed to the increase in revenues year over year. However, the use of expensive coal and petcoke inventory negatively affected the profitability. As a percentage of revenues for the quarter, the company’s inventory cost increased by more than 250 basis points to 1.6 percent. The cost of the company’s inventory had decreased during the same time period the previous year. Sequentially, the increase was 480 bps higher.

As a result of the cost increase, the operating and net margins for the quarter suffered significantly. The operating margin for the quarter was 18%, which is 1500 bps lower than the operating margin of 33% seen in the same time last year. Sequentially, there was a 100 bps decline.

In a similar vein, the net margin dropped 1300 basis points to 5% from the 18% reached in the third quarter ending in September of last year. The net margin decreased by 300 basis points from the prior quarter.

Shopping Cart
Scroll to Top