Shri Keshav Q2 FY26 Earnings Analysis

- Cement capacity increased from 0.36 million tons to 1 million tons, with plans to further increase to 2 million tons in the future. - Target capacity utilization: 45% in FY '26, 55-60% in FY '27, and 65-70% beyond. - Sales volume growth: 42% year-on-year increase in Q1 FY '26; anticipated continued ramp-up in subsequent quarters. - Market share currently around 3-4% with potential to reach 5-6% in existing markets. - Contribution from institutional buyers expected to grow from 3-4% in Q1 to 10-12% in Q2 FY '26, stabilizing at 20-25% eventually. - EBITDA expected to increase to INR 100 crores at 65-70% capacity utilization by FY '27. - Strategic focus on deepening market penetration in current regions before expanding to Kerala and Bangalore.

- EBITDA for FY '26 expected in the range of INR 50-60 crores, with margins around 25-30%. - EBITDA for FY '25 Q1 was INR 10.41 crores, showing 32.53% YoY growth in total income. - EBITDA per ton increased sharply to INR 365 in Q1 FY '26 from less than INR 100 in FY '25, indicating operational ramp-up. - With 45% capacity utilization, management expects EBITDA margins to sustain; 65-70% utilization could yield INR 100 crore EBITDA by FY '27. - PAT growth is expected but influenced by deferred tax liabilities; focus remains on EBITDA and PBT. - Earnings growth driven largely by volume increase and capacity expansion (from 0.36 million to 1 million tons). - Solar segment also contributes significantly to EBITDA (INR 7.8 crores in Q1 FY '26) with stable power sale realizations. - Management targets EBITDA per ton to approach South industry average (~INR 560) within a year.

- No major capex planned until FY '27; focus is on stabilizing the recently completed cement plant expansion. - Future capacity increase for cement (up to 1.6-1.8 million tons) will require adding crushing and grinding capacity once current capacity utilization reaches around 70%. - Potential future solar capacity addition of about 30 MW is under Board consideration, but no decision taken yet; planned post cement plant stabilization. - RMC (Ready-Mix Concrete) plant project study completed; project initiation delayed by a quarter, will commence once cement plant stabilizes (expected by Q2 or Q3 FY '26). - Capex in solar and RMC will be considered after plant stabilization, likely post-Q2 FY '26. - Existing solar plant investment approx. INR 196 crores for 40 MW capacity; payback period around 8-9 years with operational cost efficiency improvements expected in future expansions.

- No immediate plans for new capacity addition or major capex until FY '27, focusing on stabilizing the existing cement plant. - Debt is set to reduce significantly with three term loans closing this year; two already closed in Q1 and one by Q4. - Debt reduction is expected to continue steadily over the next 3 years, repaying around 30%-40% (~INR 70 crores). - Debt will only increase if new cement/RMC plants are added in the future, but currently, no such plans are indicated. - Management confident about servicing and repaying existing debt through internal accruals without needing to raise additional capital. - Board is discussing potential solar capacity expansion, but no financing details or timelines have been provided yet.

- The company has begun receiving orders from institutional/government projects, such as KRIDL (Karnataka Road Infrastructure Development Corporation). - In the last quarter, they dispatched around 3,000 to 4,000 tons to institutional clients. - This quarter, they expect to more than double that institutional order quantity. - They anticipate institutional buyer contribution to stabilize between 20% to 25% of volumes in the near future. - The company is targeting increased sales through deeper market penetration and new customer acquisition but currently focusing on existing markets before expanding to new regions like Kerala or Bangalore. - Institutional orders are expected to grow steadily as they qualify for more government-related infrastructure projects due to increased capacity.