MANGLMCEM - Mangalam Cement

📊 NSE: MANGLMCEM 🏢 Cement - North India 📅 Last Updated: 12/14/2025 9:33

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations decreased by 2.58% YoY, falling from INR 1,725.48 Cr in FY24 to INR 1,680.99 Cr in FY25. The company operates as a single-segment entity focused on cement manufacturing.

Geographic Revenue Split

Not explicitly disclosed in percentage terms, but the company faces high geographical concentration risks, primarily operating in Rajasthan with a significant presence in the Kota region as evidenced by local newspaper advertisements.

Profitability Margins

Profit Before Tax (PBT) margin contracted from 5.74% in FY24 to 4.16% in FY25. Net Profit Before Tax fell 29.38% YoY to INR 69.99 Cr from INR 99.11 Cr, driven by higher freight and finance costs despite lower power expenses.

EBITDA Margin

Operating profit before working capital changes stood at INR 196.87 Cr in FY25, representing an 11.3% margin on total income, a decrease from the 12.2% margin (INR 215.42 Cr) recorded in FY24.

Capital Expenditure

Historical capital expenditure for FY25 was INR 125.41 Cr, primarily directed towards the purchase of property, plant, and equipment and capital work-in-progress, compared to INR 98.75 Cr in FY24.

Credit Rating & Borrowing

The company maintains an adequate liquidity profile with gross cash accruals of INR 156 Cr in FY24. PBILDT interest coverage improved to 3.48x in 9MFY24. Total borrowings as of March 31, 2025, include non-current borrowings of INR 194.23 Cr and current borrowings of INR 420.69 Cr.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include Limestone (partially procured from high-cost open markets), Fly Ash, and Gypsum. Cost of materials consumed was INR 296.57 Cr in FY25, representing 17.6% of total revenue.

Import Sources

Limestone is sourced from local mines and open markets; specific states or countries for other additives are not disclosed in the available documents.

Capacity Expansion

Current capacity is not explicitly stated in MTPA; however, the company is targeting a scale of operation with total operating income exceeding INR 2,000 Cr to trigger a positive rating action.

Raw Material Costs

Raw material costs increased by 2.03% YoY to INR 296.57 Cr in FY25. The company faces pressure from high-cost limestone procurement from open markets which limits margin expansion.

Manufacturing Efficiency

Operating efficiency is being targeted through moderation in input costs; however, specific capacity utilization percentages were not disclosed.

Logistics & Distribution

Freight and Forwarding costs increased by 8.39% YoY to INR 383.32 Cr in FY25, representing 22.8% of revenue, up from INR 353.63 Cr in FY24.

📈 Strategic Growth

Expected Growth Rate

19%

Growth Strategy

The company aims to reach a total operating income of over INR 2,000 Cr (a 19% increase from current levels) by improving scale and maintaining PBILDT margins above 18%. Strategy includes optimizing the sales mix, leveraging state government subsidies/rebates, and reducing overall gearing to below 0.5x.

Products & Services

The company sells cement bags and related cementitious products to retail and institutional customers.

Brand Portfolio

Mangalam Cement.

Market Expansion

The company is focusing on improving its sales mix and eligibility for subsidies from various state governments to enhance realizations.

Strategic Alliances

The company has no subsidiaries, joint ventures, or associates as of March 31, 2025.

🌍 External Factors

Industry Trends

The cement industry is characterized by cyclicality and regional supply-demand imbalances. Current trends show a moderation in input costs but persistent competitive pressure in high-density regions like Rajasthan.

Competitive Landscape

Faces intense competition from larger players like ACC and regional competitors, which limits its pricing power and market share expansion.

Competitive Moat

The company lacks a strong national moat, operating as a modest-scale player with geographical concentration. Its competitive advantage is tied to regional brand presence and state-level subsidies.

Macro Economic Sensitivity

Highly sensitive to the cyclicality of the cement industry and infrastructure spending. Profitability is directly tied to volatility in coal/petcoke prices (Power & Fuel) and diesel prices (Freight).

Consumer Behavior

Demand is driven by regional construction cycles and government infrastructure projects in Northern India.

Geopolitical Risks

Exposure to global fuel price volatility affects power and fuel costs, which constitute over 27% of total expenses.

⚖️ Regulatory & Governance

Industry Regulations

Subject to environmental norms for cement plants and mining regulations for limestone extraction. Complies with Section 186 of the Companies Act for investments.

Environmental Compliance

The company spent its required CSR amounts for FY25, with no unspent balance remaining.

Taxation Policy Impact

Current tax/MAT for FY25 was INR 12.17 Cr, representing an effective tax rate of approximately 17.4% on PBT.

Legal Contingencies

Pending litigations regarding uncertain positions of duty, taxes, and cess were identified as Key Audit Matters. Specific case values were not aggregated in the summary, but Note 42.2 in the full report details these impacts.

⚠️ Risk Analysis

Key Uncertainties

Uncertainty regarding the outcome of pending tax and duty disputes could lead to significant financial settlements. Volatility in input prices (Power/Fuel) poses a risk to the 11.3% EBITDA margin.

Geographic Concentration Risk

High risk with operations primarily concentrated in a single region, making it vulnerable to local economic downturns and regional pricing wars.

Third Party Dependencies

Significant dependency on open-market suppliers for high-cost limestone and external power/fuel vendors.

Technology Obsolescence Risk

The company uses SAP for accounting with audit trail features, though database-level logging was noted as an exception, indicating a need for further digital control strengthening.