SAURASHCEM - Saurashtra Cem.

📊 NSE: SAURASHCEM 🏢 Cement - North India 📅 Last Updated: 12/14/2025 12:55

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 18.6% YoY to INR 809.20 Cr in H1 FY26. The Cement & Clinker segment grew 19.3% YoY to INR 774.31 Cr, while the Paints segment grew 5.9% YoY to INR 34.89 Cr.

Geographic Revenue Split

The majority of revenues (estimated >90%) are derived from the Saurashtra region in Gujarat, where the company's primary manufacturing assets are located.

Profitability Margins

The company achieved a significant turnaround, reporting a consolidated Profit Before Tax (PBT) of INR 9.06 Cr in H1 FY26 compared to a loss of INR 35.50 Cr in H1 FY25. The PBT margin stands at 1.12%.

EBITDA Margin

Core profitability improved as segment results for Cement & Clinker reached INR 14.72 Cr in Q2 FY26. Finance costs were reduced by 37.8% YoY to INR 4.78 Cr in H1 FY26, aiding margin expansion.

Capital Expenditure

The company completed a modernization project for its Sidheegram cement plant in FY25 at a total cost of INR 80 Cr. No major capital expenditure is planned for FY26.

Credit Rating & Borrowing

The company maintains a stable credit profile with total debt standing at INR 135.7 Cr as of March 2025, up from INR 85.0 Cr in March 2024 due to modernization funding.

⚙️ Operational Drivers

Raw Materials

Key raw materials include limestone (sourced from captive mines), gypsum, and energy inputs like coal and petcoke. Raw material and energy costs typically represent 60-70% of total production costs.

Import Sources

Limestone is sourced locally in Gujarat through captive mines; coal and petcoke are sourced through a mix of domestic supplies and imports from the Middle East or other international markets.

Key Suppliers

Not specifically disclosed in the documents, though the company relies on major fuel suppliers and local mining operations.

Capacity Expansion

Current grinding capacity is 2.7 MTPA and clinker capacity is 2.8 MTPA. No immediate expansion is planned following the INR 80 Cr modernization of the Sidheegram plant in FY25.

Raw Material Costs

Raw material costs are managed through integrated operations. The modernization of the Sidheegram plant was specifically aimed at improving energy efficiency and reducing the cost of production.

Manufacturing Efficiency

Manufacturing efficiency is high, with capacity utilization levels exceeding 95% from FY2022 to FY2025.

Logistics & Distribution

Distribution is focused on the Gujarat market, leveraging the proximity of the Ranavav and Sidheegram plants to key consumption centers in the Saurashtra region.

📈 Strategic Growth

Expected Growth Rate

12%

Growth Strategy

Growth will be achieved by leveraging the modernized Sidheegram plant to improve throughput and efficiency. The company aims to capitalize on sustained demand from the housing and infrastructure sectors in Gujarat while maintaining its high capacity utilization (>95%) and regional brand dominance.

Products & Services

The company sells cement bags (OPC and PPC), clinker, and various paint products.

Brand Portfolio

Hathi, Sidhee, and Snowcem.

New Products/Services

The company continues to promote its 'Snowcem' paint brand, which currently contributes 2-5% of overall revenues.

Market Expansion

Focus remains on consolidating its position in the Saurashtra and broader Gujarat markets where it has established brand equity.

Market Share & Ranking

The company is a significant regional player in the Gujarat cement market with high brand recall.

Strategic Alliances

Saurashtra Cement is a flagship company of the Mehta Group, providing it with group-level strategic support and management expertise.

🌍 External Factors

Industry Trends

The industry is seeing a trend toward consolidation and a focus on green energy. SCL is positioning itself through plant modernization and maintaining high efficiency to compete with larger players.

Competitive Landscape

Intense competition exists in the Western India market from multiple large-scale industry players.

Competitive Moat

The company's moat is its regional brand strength (Hathi/Sidhee) and integrated manufacturing, which are sustainable due to the high logistics costs that deter distant competitors from entering the Saurashtra market.

Macro Economic Sensitivity

Highly sensitive to GDP growth and infrastructure spending in India; cement demand typically correlates at 1.2x to GDP growth.

Consumer Behavior

Increasing consumer preference for branded cement in the individual home builder (IHB) segment supports SCL's retail-focused brands.

Geopolitical Risks

Geopolitical tensions affecting global coal and petcoke prices represent a significant risk to operating margins.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Mines and Minerals (Development and Regulation) Act for limestone sourcing and environmental standards set by the state and central boards.

Environmental Compliance

The company must comply with stringent pollution control norms for cement manufacturing and mining regulations for limestone extraction.

Taxation Policy Impact

The company is subject to standard Indian corporate tax rates; current tax liabilities were nil for H1 FY26.

Legal Contingencies

The company reported a minor provision for doubtful debts of INR 0.10 lakhs; no major pending litigation values were disclosed in the financial extracts.

⚠️ Risk Analysis

Key Uncertainties

Volatility in fuel prices (coal/petcoke) and cyclicality in the construction industry are the primary business risks, with potential margin impacts of 5-10%.