Any current/future new fundraising through debt or equity?

Currently, Shri Keshav Cement has taken a loan of INR 80 crores for capex, with INR 15 crores disbursed as of September 30, 2023; the balance INR 65 crores to be disbursed by March 2024. The average interest rate on borrowing is around 10.35%, with expectations of a slight reduction by 50-60 basis points. There is no current plan for raising additional funds through rights issues, equity infusion, or market borrowings in the next six months. The company intends to focus on repaying existing debt earlier than projected, unless new expansion opportunities arise. New capital infusion will only be

Any current/future capex/capital investment/strategic investment?

Shri Keshav Cement And Infra Limited is currently undertaking a capex to expand cement capacity to 1 million tons, expected to be commissioned by June-July 2024. Major equipment orders are 95% complete, with remaining non-critical items to be ordered near project completion. The expansion includes installation of a new kiln, breeder tower, and cooler to modernize the 30-year-old plant, aiming to reduce fuel and power consumption per ton of cement. A 3 megawatt addition to solar power capacity is planned to boost profits, leveraging existing infrastructure. The capex is expected to signific

Future growth expectations in sales/revenue/volumes?

Cement capacity expansion to 1 million tons expected by June-July 2024. FY24 expected to see subdued capacity utilization of 50%-55% due to teething issues at new plant. Top line for FY24 projected around INR 175-200 crores or more, with EBITDA expected to improve over current levels. From FY26 onwards, full capacity utilization with optimized plant and new machinery expected, driving stronger revenue growth. Improved EBITDA margins from 30%-31% currently to 35%-36% post-capex due to lower production cost (fuel, power savings). Enhanced marketing efforts, increased sales force, and e

Future growth expectations in earnings/operating earnings/profits/EPS?

The ongoing capex to increase cement capacity to 1 million tons is expected to boost EBITDA margins from around 30-31% to approximately 35-36%. By FY26, with 100% new and optimized machinery, the company anticipates higher capacity utilization and significantly improved operating profits. EBITDA per ton is projected to increase to around INR900-1,000 due to savings in fuel and power consumption, alongside solar power gains of over INR40 crores yearly. Net profit and EPS show a positive trajectory, with H1 FY24 net profit at INR2.75 crores and EPS of 1.84, expected to improve post-capex s

Shri Keshav Cements & Infra LtdQ2 FY24Cement & Cement Products

Shri Keshav Cements & Infra Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹98.5Market Cap: ₹175 CrSector: Cement & Cement Products

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

Yes

Order

N/A

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

Cement capacity expansion to 1 million tons expected by June-July 2024.
FY24 expected to see subdued capacity utilization of 50%-55% due to teething issues at new plant.
Top line for FY24 projected around INR 175-200 crores or more, with EBITDA expected to improve over current levels.
From FY26 onwards, full capacity utilization with optimized plant and new machinery expected, driving stronger revenue growth.
Improved EBITDA margins from 30%-31% currently to 35%-36% post-capex due to lower production cost (fuel, power savings).
Enhanced marketing efforts, increased sales force, and entry into bigger markets and government projects expected to drive volume growth.
Geographic sales expansion planned within South Maharashtra, Goa, North Karnataka, with potential reach to Pune and Bangalore if required.
Cement demand in India projected to grow at a CAGR of 5.65%, providing strong industry tailwinds.

Margin guidance

Category 1

The ongoing capex to increase cement capacity to 1 million tons is expected to boost EBITDA margins from around 30-31% to approximately 35-36%.
By FY26, with 100% new and optimized machinery, the company anticipates higher capacity utilization and significantly improved operating profits.
EBITDA per ton is projected to increase to around INR900-1,000 due to savings in fuel and power consumption, alongside solar power gains of over INR40 crores yearly.
Net profit and EPS show a positive trajectory, with H1 FY24 net profit at INR2.75 crores and EPS of 1.84, expected to improve post-capex stabilization.
Finance costs are expected to decline with likely early loan repayment, positively impacting PAT in the next two years.
Overall, expanding capacity and lowering production costs will translate into substantial growth in earnings, operating income, and profitability over the next 2-3 years.

See what Shri Keshav Cements & Infra Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

Currently, Shri Keshav Cement has taken a loan of INR 80 crores for capex, with INR 15 crores disbursed as of September 30, 2023; the balance INR 65 crores to be disbursed by March 2024.
The average interest rate on borrowing is around 10.35%, with expectations of a slight reduction by 50-60 basis points.
There is no current plan for raising additional funds through rights issues, equity infusion, or market borrowings in the next six months.
The company intends to focus on repaying existing debt earlier than projected, unless new expansion opportunities arise.
New capital infusion will only be considered if it improves the company's growth prospects; otherwise, the focus will be on cutting down liabilities.

Order book

The transcript on page 17 of the document does not explicitly mention the current or expected order book or pending orders for Shri Keshav Cement And Infra Limited. However, relevant insights include: - The company is working on expanding capacity to 1 million tons, which will enable it to enter Tier 2 branding with better pricing and improved capacity utilization. - With improved EBITDA and reduced variable costs due to capex in power and fuel savings, the company expects to increase brand equity and market penetration. - Focus is on increasing retail points, building marketing efforts, and targeting institutional and government bulk orders. - The current sales geography (South Maharashtra, Goa, North Karnataka) is considered sufficient for the expanded capacity, with possible reach to Pune and Bangalore if needed. - The company already has quality clearances for government projects but currently limited by capacity to fulfill requirements. No explicit figures or detailed order book data is provided.

See what Shri Keshav Cements & Infra Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

Shri Keshav Cement And Infra Limited is currently undertaking a capex to expand cement capacity to 1 million tons, expected to be commissioned by June-July 2024.
Major equipment orders are 95% complete, with remaining non-critical items to be ordered near project completion.
The expansion includes installation of a new kiln, breeder tower, and cooler to modernize the 30-year-old plant, aiming to reduce fuel and power consumption per ton of cement.
A 3 megawatt addition to solar power capacity is planned to boost profits, leveraging existing infrastructure.
The capex is expected to significantly improve EBITDA margins (aiming for INR900-1000 per ton) by reducing variable costs, especially energy costs, and enhance capacity utilization.
INR80 crore loan sanctioned for this capex; INR15 crore disbursed as of Sep 30, 2023, with the balance expected by March 2024.
No current plans for equity infusion; focus is on repaying debt unless new expansion opportunities arise.

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