Shree Cement surpasses Q3 profit expectations amid growing volume and reduced fuel costs

Shree Cements Q3: Shree Cement, the third-largest cement company in India by market capitalisation, announced a Q3 profit that exceeded expectations, propelled by a surge in volume and a decline in fuel prices.

The company's profit for the three months ending December 31 nearly tripled from the previous year, reaching Rs 734 crore, surpassing the analysts' average estimate of Rs 580 crore, as per LSEG data.

Cement companies have witnessed significant profit growth over the past quarters, driven by the government's focus on housing and infrastructure projects ahead of the upcoming general elections in India.

Managing Director Neeraj Akhoury attributed the robust improvement to "strong volume growth, building premium products, and the softening of fuel prices," according to a company statement.

Power and fuel costs, comprising almost a third of the total expenses, experienced a 5 per cent decline. Shree Cement's total sales volume rose by 10.7 per cent to 8.89 million tons.

In fiscal 2024, the top four cement companies by market capitalisation, excluding market leader UltraTech Cement, reported double-digit profit growth in each of the three quarters. UltraTech had a single-digit growth in the June quarter.

Shree Cement's gross revenue from operations surged by 19.3 per cent from a year earlier, reaching Rs 6,202 crore.

Analysts at Elara Capital foresee strong volume growth in the sector for the fourth quarter, citing the onset of the busy construction season and increased pre-election government spending.

Earlier this month, market leader UltraTech Cement surpassed profit estimates, driven by robust demand and price increases.

Shares of Shree Cement closed 1.7 per cent higher ahead of the results.

(With Reuters inputs.)