Shree Cement Targets Industry-Beating Cost Efficiency

Shree Cement Ltd.’s operational performance was impacted in the first quarter as volumes in eastern India didn't pick up amid a supply glut and costs rose.

The company, however, expects better cost efficiency than peers in the ongoing quarter ending September, HM Bangur, managing director at Shree Cement, said in an interview with BloombergQuint.

The company’s operating income declined more than 14% sequentially to Rs 1,013 crore for the quarter ended June because of higher power and fuel costs.

The cement maker said while power costs will rise, the increase wouldn't be proportionate to industry standards as their energy efficiency kicks in. The company expects to maintain a margin of Rs 1,400 a tonne in July-September.

Volumes, however, will remain lower sequentially as the monsoon slows construction activity, he is confidence of industry-beating growth in the next three years.

Cement volumes for the industry are expected to grow 10% percent over the next three years, he said.

Prices are likely to rise 2-3% sequentially across all regions, while maximum demand will come from the north, he said.