Shree Cement Limited: history, ownership, mission, how it works & makes money

A Brief History of Shree Cement Limited

Shree Cement Limited was founded in 1979 by Shri Bangur and has its headquarters in Kolkata, India. The company primarily produces cement and aggregates and has become one of India’s largest cement producers.

In 1990, Shree Cement established its first manufacturing plant in Beawar, Rajasthan, with a production capacity of **0.6 million tons** per annum. The success of this plant laid the groundwork for expansion into other states.

By 2001, the company had ramped up its production capacity to **2.0 million tons**, introducing a second plant in Ras, Rajasthan. Over the years, Shree Cement has strategically expanded its footprint, with plants now located in several states including Uttarakhand, Chhattisgarh, and Gujarat.

As of October 2023, Shree Cement operates with an installed capacity of **43.4 million tons** per annum (MTPA) and continues to be one of the leading players in the Indian cement industry.

Financial Performance

Shree Cement has shown consistent growth in revenue and profitability. In the fiscal year 2022-2023, the company reported total revenues of **₹17,067 crore** (approximately **$2.08 billion**) and EBITDA of **₹4,473 crore** (around **$550 million**).

The net profit for the same year was **₹2,146 crore**, reflecting a growth of **7%** year-over-year. This robust performance can be attributed to rising cement demand and operational efficiencies.

Stock Performance

Shree Cement's stock is listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) under the ticker symbol SHREECEM. As of October 2023, the stock price was approximately **₹24,700**, with a market capitalization around **₹90,000 crore** (approximately **$11 billion**).

Over the past year, the stock has shown volatility but has maintained a **5%** increase since January 2023. The price-to-earnings (P/E) ratio stands at **45.5**, indicating strong market expectations for future growth.

Expansion and Capacity

Shree Cement has been aggressively expanding its capacity. The following table outlines the company's capacity milestones over the years:

Sustainability Initiatives

Shree Cement is committed to sustainability, with initiatives aimed at reducing carbon footprints. The company has set a target of achieving **net-zero** carbon emissions by **2050**. Currently, around **40%** of its energy needs are sourced from renewable energy.

The company has also invested in waste management practices, utilizing industrial by-products in the manufacturing process, which not only minimizes waste but also reduces costs.

Market Position

Shree Cement is currently the third largest cement producer in India, trailing behind UltraTech Cement and ACC. The company holds a market share of approximately **10%** in the Indian cement sector, and it continues to innovate to improve its competitive edge.

In addition to cement, Shree Cement has diversified into power generation, with a total generation capacity of **1,707 MW** through various projects, including renewable sources like wind and solar. This diversification supports its cement production needs while also contributing to the national grid.

A Who Owns Shree Cement Limited

Shree Cement Limited, incorporated in 1979, has transformed into one of India's leading cement manufacturers. The ownership of the company is largely concentrated among a few key stakeholders, reflecting a blend of institutional and retail investors.

As of September 2023, the shareholding structure of Shree Cement Limited is as follows:

The key promoters of Shree Cement are the Bangur family, who have played a crucial role in establishing and growing the company. Under the leadership of Mr. H.P. Bangur, the company has expanded its production capacity significantly over the years.

Shree Cement operates with a current production capacity of approximately 44.4 million tons per annum, making it one of the top cement producers in India. In the financial year ending March 2023, the company reported a total income of ₹15,583.35 crores, with a net profit of ₹2,255.73 crores.

In terms of stock performance, Shree Cement's share price has demonstrated strong growth, with a market capitalization exceeding ₹1.45 lakh crores as of September 2023. The stock has shown resilience even in challenging market conditions, reflecting investor confidence in the company's robust business model.

The company is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), providing liquidity and facilitating ease of trade for its shareholders. Over the last year, it has experienced a price range from ₹18,000 to ₹25,000 per share.

Shree Cement's effective governance structure and strong financial health have attracted various institutional investors. The company maintains a dividend payout ratio of approximately 10%, signaling a commitment to returning value to its shareholders.

As of the latest financial data, the company has a debt-to-equity ratio of 0.15, indicating a conservatively leveraged balance sheet, which enhances its attractiveness to investors. Shree Cement has also focused on sustainability, investing in alternative fuel sources and reducing carbon emissions, which positions it favorably in an increasingly eco-conscious market.

Shree Cement Limited Mission Statement

Shree Cement Limited, a prominent player in the Indian cement industry, has crafted its mission statement to reflect its commitment to sustainable growth and quality. The mission is focused on being the best in terms of production capacity and profitability while ensuring environmental responsibility. The vision includes a pledge to build a sustainable future by adopting innovative technologies and practices.

As of the fiscal year ending March 2023, Shree Cement's total installed capacity stood at approximately 44.4 million tons per annum. The company aims to expand this capacity through strategic investments and partnerships, targeting 60 million tons by 2030.

The mission statement emphasizes four key pillars: quality, sustainability, innovation, and customer satisfaction. Each of these pillars is underpinned by specific objectives:

• Quality: To provide high-quality cement products that meet global standards.
• Sustainability: To minimize the ecological footprint through responsible resource management.
• Innovation: To invest in research and development for advanced cement technology.
• Customer Satisfaction: To deliver exceptional service and build long-term relationships with stakeholders.

Shree Cement's financial performance aligns with its mission, showcasing strong growth metrics. For the fiscal year 2023, the company reported revenues of approximately ₹21,000 crores, achieving an EBITDA margin of 28%. This illustrates effective cost management and operational efficiency.

Furthermore, Shree Cement focuses on enhancing its operational efficiency and reducing energy consumption. The company aims for a reduction in CO2 emissions per ton of cement produced by 33% by 2030, in line with global sustainability goals.

The mission statement is not only a guiding principle but also forms the foundation for corporate social responsibility initiatives. Shree Cement has committed to investing approximately ₹500 crores over the next five years in community development programs, including education and healthcare.

In terms of market positioning, Shree Cement aims to capture a larger share of the southern and western Indian markets, currently holding the 4th largest position in the country. The company is also exploring international expansion opportunities, particularly in emerging markets.

Shree Cement Limited's mission statement serves as a blueprint for its strategies and operations, driving the company towards achieving its ambitious growth targets while maintaining a steadfast commitment to quality and sustainability.

How Shree Cement Limited Works

Shree Cement Limited operates primarily in the manufacturing of cement and power generation. The company was incorporated in 1979 and has grown to become one of India’s largest cement producers, with a production capacity that reached 46.4 million tons as of 2023. The company's operational strategy hinges on cost-control measures, efficient logistics, and a strong distribution network.

The core products of Shree Cement include various types of cement such as Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC). The company also produces and sells other materials, such as aggregates and clinker. Shree Cement's focus on sustainability is evident in its use of alternative fuels and raw materials, which have significantly reduced its carbon footprint.

Shree Cement operates a total of 16 manufacturing plants across India, with major facilities located in Rajasthan, Uttarakhand, Bihar, and Jharkhand. The company employs over 7,000 individuals, further contributing to the local economies where it operates.

Shree Cement's financial performance has shown consistency over the years. For the financial year ending March 2023, the company reported a revenue increase of 10.3% year-on-year. The consolidated net profit for the same period was INR 2,400 crores, indicating a growth of 14.3% from the previous year.

The company has also invested in renewable energy, establishing a capacity of approximately 700 MW of power generation, primarily sourced from waste heat recovery and solar energy. This commitment to renewable energy is aimed at reducing dependency on conventional sources and lowering overall operational costs.

Distribution plays a vital role in Shree Cement's operations. The company has a vast network that includes more than 1,800 distributors and over 54,000 retailers across India. This extensive network ensures that products reach various market segments effectively and efficiently.

Shree Cement maintains a robust debt-to-equity ratio of 0.42, which reflects its prudent financial management strategy. The company’s strong cash flow allows it to undertake capital expenditure (CapEx) without over-leveraging its balance sheet.

Through strategic acquisitions and entry into new markets, Shree Cement continues to expand its footprint. The company’s recent acquisition of a cement plant in Rajasthan has added approximately 1.5 million tons to its production capacity.

The company is also heavily involved in community initiatives, focusing on health, education, and infrastructure development in the regions where it operates. Shree Cement has invested over INR 100 crores in various corporate social responsibility (CSR) initiatives as part of its commitment to sustainable development.

How Shree Cement Limited Makes Money

Shree Cement Limited is one of the largest cement producers in India, contributing significantly to the construction sector. The company generates revenue primarily through the manufacturing and sale of cement and power. In FY 2022-23, Shree Cement reported a consolidated revenue of approximately ₹16,566 crore, up from ₹15,916 crore in FY 2021-22.

The company operates a variety of brands under its umbrella. Its flagship products include Shree Ultra, Bangur Cement, and Rockstrong Cement. The cement division contributes about 85% of the total revenue, while its power generation segment, which includes renewable energy sources, accounts for the remainder.

Shree Cement's cement production capacity stands at about 47.4 million tonnes per annum (MTPA) as of March 2023. The company has made significant investments in expanding its production facilities, particularly in the northern and eastern regions of India, where demand for cement continues to grow due to infrastructure development.

Cost control and operational efficiency are vital to Shree Cement’s profitability. The company's EBITDA margin was approximately 25% in FY 2022-23, reflecting its ability to manage costs despite fluctuating raw material prices. The average cost of production per tonne of cement decreased due to improved operational efficiencies and scaling up of production.

In the power segment, Shree Cement has established both thermal and renewable energy sources. The company has a current power generation capacity of about 1,800 MW, inclusive of 600 MW of renewable energy, approximately 33% of its total generation capacity. The power segment not only provides energy for its cement production but also allows the company to sell excess power to the grid, further diversifying its revenue streams.

With the government focusing on infrastructure development, Shree Cement has positioned itself well to capitalize on future growth opportunities. The expected CAGR (Compound Annual Growth Rate) for the Indian cement industry is around 8-10% from 2023 to 2028. This aligns with Shree Cement’s strategy of increasing market share and expanding its production capabilities.

Additionally, Shree Cement's commitment to sustainability and reducing carbon emissions is increasingly becoming a part of its business model. The company has invested in alternative fuels and raw materials, contributing to its long-term cost savings and enhancing its market reputation.

The current market dynamics and Shree Cement's strategic initiatives suggest a promising outlook for the company. As of October 2023, the stock price is hovering around ₹25,000, reflecting a market capitalization of approximately ₹97,000 crore.