KESORAMIND - Kesoram Inds.

📊 NSE: KESORAMIND 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 8:53

💰 Financial Performance

Revenue Growth by Segment

The Cement division was demerged to UltraTech Cement effective March 2025, leading to a 93% reduction in the total revenue base from INR 4,035.94 Cr in FY24 to INR 279.34 Cr in FY25. The remaining Rayon and Transparent Paper segment generated INR 132.56 Cr in H1 FY26.

Geographic Revenue Split

Not disclosed in available documents; operations are primarily concentrated in India with headquarters in Kolkata, West Bengal.

Profitability Margins

Net loss margin for H1 FY26 was -94.4% (Net Loss of INR 125.21 Cr on Total Revenue of INR 132.56 Cr). Historically, the Rayon business has been PBT negative despite generating INR 250-300 Cr in annual revenue.

EBITDA Margin

Not disclosed for H1 FY26; historical 9M FY24 production growth was 49% and sales growth was 54% prior to the cement demerger.

Credit Rating & Borrowing

ICRA rating reflects the refinancing of high-cost NCDs (19% interest) with 10-year term loans at 11.25% interest in February 2024, reducing the interest rate by 7.75% and eliminating immediate refinancing risks.

⚙️ Operational Drivers

Raw Materials

Wood pulp and chemicals (Rayon/Paper); Limestone and coal (Cement - demerged).

Capacity Expansion

Cement capacity was 5.4 MTPA as of 9M FY24; Rayon revenue capacity is approximately INR 250-300 Cr annually.

Raw Material Costs

Raw material costs for H1 FY26 were INR 84.42 Cr, representing 63.7% of total revenue.

Manufacturing Efficiency

Production growth of 49% in 9M FY24; management is looking at selling closer to markets to optimize realizations.

📈 Strategic Growth

Expected Growth Rate

54%

Growth Strategy

The company is executing a massive deleveraging strategy through the demerger of its capital-intensive Cement division to UltraTech Cement Limited. This allows the company to transfer significant debt and focus on its subsidiary, Cygnet Industries (Rayon and Transparent Paper), while an open offer by Frontier Warehousing Limited at INR 5.48 per share provides a potential change in promoter support.

Products & Services

Rayon Yarn, Transparent Paper, and Cement (Birla Shakti brand, now demerged).

Brand Portfolio

Birla Shakti, Kesoram Rayon.

Strategic Alliances

Composite Scheme of Arrangement with UltraTech Cement Limited for the demerger of the cement business.

🌍 External Factors

Industry Trends

The cement industry is undergoing rapid consolidation with large players planning massive capacity additions through 2030. This trend forces smaller players to either scale up significantly or join larger groups to remain relevant, as seen in Kesoram's demerger of its 5.4 MTPA capacity to UltraTech.

Competitive Landscape

Intense competition from large-scale cement manufacturers like UltraTech Cement and other major players expanding capacity.

Competitive Moat

The company possesses a long track record of operations and established brand names like Birla Shakti (cement) and Kesoram Rayon. However, the sustainability of this moat is challenged by the loss-making nature of the Rayon business and the exit from the more competitive cement sector.

Macro Economic Sensitivity

High sensitivity to the cyclical nature of the cement business and inflationary trends in energy costs.

Consumer Behavior

Growth in demand for blended cement (40% growth) and OPC (50% growth) segments noted in historical volume trends.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI LODR, Companies Act 2013, and NCLT demerger regulations.

Environmental Compliance

ESG and statutory compliance costs are managed as part of corporate governance, though specific INR Cr values for ESG are not disclosed.

Taxation Policy Impact

FY25 deferred tax charge of INR 26.25 Cr; H1 FY26 saw a minor tax credit of INR 0.09 Cr.

Legal Contingencies

The Composite Scheme of Arrangement for the demerger was approved by the NCLT Kolkata Bench on November 14, 2024, and the Mumbai Bench on November 26, 2024. There have been no penal actions by stock exchanges in the last 10 years.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the future viability and path to profitability for the Rayon and Transparent Paper business, which has historically operated at a loss. The company also faces risks associated with the successful completion of the open offer by Frontier Warehousing Limited.