Shree Cement shares are facing significant pressure after the company reported disappointing results for the Q2 FY2024 quarter, with a massive decline in its net profit.
Net Profit: Shree Cement’s net profit plunged 81% year-on-year (YoY) to ₹77 crore in Q2 FY24, down from ₹401 crore in the corresponding quarter last year. This sharp decline in profitability has raised concerns among investors.
Revenue Growth: Despite the profit drop, the company’s revenue grew by 10% YoY to ₹4,850 crore, driven by higher cement sales volume. However, this increase in revenue was insufficient to offset rising costs.
EBITDA Margin: The EBITDA margin saw a significant drop to 13.2% in Q2 FY24 compared to 21.4% in Q2 FY23. The contraction in margins was primarily due to escalating input costs, especially in raw materials and power & fuel expenses, which have been on the rise due to global market fluctuations.
Increased Expenses: Total expenses for the quarter surged by nearly 15% YoY, further eroding profitability. The impact of inflation and higher logistics costs added to the pressure on margins.