💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment: Manufacturing and Selling of Cement. Revenue from operations for Q2 FY26 stood at INR 140.31 Cr, representing a 16.48% YoY growth compared to INR 120.46 Cr in Q2 FY25. However, on a half-yearly basis, H1 FY26 revenue of INR 290.87 Cr was nearly flat, declining 0.59% from INR 292.61 Cr in H1 FY25. Annual revenue for FY25 saw a significant decline of 34.08% to INR 526.98 Cr from INR 799.45 Cr in FY24.

Geographic Revenue Split

Not disclosed in available documents, though the company is headquartered in Hyderabad and operates primarily in Southern India.

Profitability Margins

Profitability has seen a sharp decline; Net Profit Margin dropped from 5.00% in FY24 to 1.00% in FY25. Operating Profit Margin also contracted from 10.00% to 4.00% in the same period. For H1 FY26, the consolidated Profit After Tax was INR 24.42 Cr, a significant recovery from the INR 1.24 Cr loss reported in H1 FY25.

EBITDA Margin

EBITDA margin for FY25 was 6.72%, a sharp decrease from 11.74% in FY24. This 42.76% reduction in core profitability reflects higher input costs and lower realizations during the fiscal year.

Capital Expenditure

The company is undergoing a massive expansion with Capital Work-in-Progress (CWIP) standing at INR 895.48 Cr as of September 30, 2025, up 11.19% from INR 805.38 Cr in March 2025. This planned expenditure is nearly 2.4 times the current Property, Plant, and Equipment base of INR 368.51 Cr.

Credit Rating & Borrowing

The company holds a credit rating of CARE BBB+ (Stable) and IVR BBB+ (Positive) for its proposed NCDs. Interest coverage ratio significantly weakened by 72.29%, falling from 6.64x in FY24 to 1.84x in FY25 due to increased debt servicing requirements.

⚙️ Operational Drivers

Raw Materials

Limestone is the primary raw material, supported by coal for power generation. Cost of materials consumed in H1 FY26 was INR 40.09 Cr, representing 13.78% of total revenue.

Import Sources

Not disclosed in available documents; limestone is typically sourced from local captive mines.

Capacity Expansion

Current Property, Plant, and Equipment is valued at INR 368.51 Cr. The company is executing a major expansion project evidenced by INR 895.48 Cr currently in Capital Work-in-Progress, which will significantly increase the total installed capacity upon completion.

Raw Material Costs

Raw material costs for FY25 were INR 69.55 Cr. In H1 FY26, material costs rose to INR 40.09 Cr compared to INR 36.78 Cr in H1 FY25, a 9% YoY increase, impacting gross margins.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through the commissioning of the INR 895.48 Cr capacity expansion project and the monetization of an idle land bank of 17.83 acres to improve liquidity and fund operations.

Products & Services

The company manufactures and sells various grades of cement bags to retail and institutional customers.

Brand Portfolio

Deccan Cements.

Market Expansion

The company is focusing on strengthening its presence in the Southern Indian market through its 100% subsidiary, Deccan Swarna Cements Private Limited.

Strategic Alliances

Wholly owned subsidiary: Deccan Swarna Cements Private Limited.

🌍 External Factors

Industry Trends

The cement industry is currently facing a period of high capacity addition and regional price volatility. Deccan is positioning itself by tripling its asset base to achieve better economies of scale.

Competitive Landscape

Competes with regional and national cement manufacturers in the Southern Indian market.

Competitive Moat

The company's moat is built on 50 years of limestone reserves and captive power generation, providing long-term raw material security and a cost advantage over non-integrated players.

Macro Economic Sensitivity

Highly sensitive to GDP growth and interest rates; high interest rates discourage housing construction, directly reducing demand for cement.

Consumer Behavior

Increasing preference for branded cement in the individual home builder (IHB) segment and rising demand from government infrastructure projects.

Geopolitical Risks

Fluctuations in global coal prices due to geopolitical tensions impact the cost of power generation for captive plants.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by mining leases for limestone extraction and strict pollution control board norms for cement manufacturing and captive power emissions.

Environmental Compliance

The company publishes Business Responsibility reports and maintains captive power plants subject to environmental norms.

Taxation Policy Impact

The company reported a current tax liability of INR 8.48 Cr as of September 30, 2025. The effective tax rate for H1 FY26 was approximately 25.8% based on a PBT of INR 32.93 Cr.

⚠️ Risk Analysis

Key Uncertainties

The primary risk is the timely commissioning and stabilization of the INR 895.48 Cr expansion project; any delay could lead to cost overruns and liquidity stress given the 1.84x interest coverage.

Geographic Concentration Risk

High concentration in Southern India, making the company vulnerable to regional economic downturns or political changes in Telangana and Andhra Pradesh.

Third Party Dependencies

Dependent on external vendors for coal procurement and logistics providers for cement distribution.

Technology Obsolescence Risk

Low risk for core cement products, but failure to adopt modern energy-efficient manufacturing technologies could impact long-term cost competitiveness.

Credit & Counterparty Risk

Debtors Turnover Ratio fell 51.47% to 9.34x in FY25, indicating a significant increase in credit period or potential issues with receivable collections.