India Cements Share Price

India Cements Ltd

Founded on February 21, 1946, India Cements Ltd. has been a cornerstone of South India’s cement industry for decades. Headquartered in Chennai, Tamil Nadu, the company began its journey with its first plant at Sankarnagar in 1949, with an initial production capacity of 100,000 tonnes per annum (TPA). Over the years, India Cements has expanded significantly, now operating eight integrated cement plants across Tamil Nadu and Andhra Pradesh, with a total installed capacity of 15.5 million TPA.

With a 28% market share in South India, the company’s premium brands like Coromandel King, Raasi Gold, and Sankar Sakthi have become household names in the construction sector. Under the leadership of Managing Director N. Srinivasan, India Cements continues to be a key player in the industry and is actively traded on the NSE and BSE.

Expansion and Diversification (1980-1999)

• Acquired Coromandel Cement plant in Andhra Pradesh in 1990
  
• Converted Sankarnagar plant to dry process, increased capacity to 1 million TPA
  
• Established dedicated shipping division in 1991
  
• Commenced production at 2 million TPA Dalavoi plant in 1996
  
• Acquired plants of Visaka Cement and Shri Vishnu Cement
  
• Absorbed Raasi Cement Ltd in 1998, augmenting footprint in Andhra Pradesh
  

Technology Adoption (2000-2010)

• Commissioned 7.7 MW waste heat recovery system at Vishnupuram in 2004
  
• Established 17.4 MW gas-based power plant through subsidiary in 2004
  
• Upgraded Sankaridrug plant from wet to dry process in 2007
  
• Amalgamated Visaka Cement Industry Ltd in 2007
  
• Revived shipping business with acquisition of 2 vessels of 79,843 DWT
  
• Built 1 million TPA grinding plant in Chennai in 2008
  
• Acquired Chennai Super Kings IPL franchise in 2008
  

Capacity Enhancements (2011-2020)

• Obtained ISO certifications for Dalavoi, Sankarnagar, Chilamakur plants
  
• Upgraded capacities at Chilamakur and Vishnupuram plants to 4,500 TPD
  
• Secured approvals for capacity expansion at Dalavoi and Sankaridrug plants
  
• Established Indonesian subsidiary for coal mining in 2011
  
• Subsidiary supplied ~300,000 tonnes of coal till 2017
  

Recent Developments (2021-Present)

1. Privatization and Ownership Changes:

• In July 2024, UltraTech Cement acquired an additional 32.72% equity stake in India Cements for $472 million, increasing its total stake to 55.49%. As a result, India Cements became a subsidiary of UltraTech Cement.

2. Operational Initiatives:

• Domestic sales volumes grew by 5% YoY during Q3 FY25, despite lower capacity utilization.
• The company has been focusing on improving operational efficiency and aligning with UltraTech's strategic goals.

3. Exceptional Losses:

• In Q3 FY25, India Cements reported an exceptional loss of ₹190 crore due to asset write-offs and restructuring costs.

4. Sustainability Efforts:

India Cements continues to focus on sustainability by leveraging renewable energy sources and improving energy efficiency across its operations.

Outlook

India Cements is changing drastically while being owned by UltraTech Cement. Even though there are some ongoing struggles, the merger with UltraTech is assumed to provide financial synergies and improve operational effectiveness in due time. But note that, profitability in the short term remains elusive because of increased expenses and restructuring costs.

Financial Performance

India Cements has faced significant financial challenges recently, despite some operational improvements:

Q3 FY25 (October–December 2024)

• Revenue from Operations: ₹903 crore, a decline of 17% YoY from ₹1,082 crore in Q3 FY24.

• Net Loss: ₹429 crore, a sharp increase from a loss of ₹16.5 crore in Q3 FY24, primarily due to an exceptional loss of ₹190 crore.

• EBITDA: Negative at ₹-154.04 crore in Q2 FY25, reflecting operational inefficiencies and cost pressures.

• Cement Capacity Utilization: Stood at 57%, with domestic sales volume growing by 5% YoY.

FY24 Annual Performance

• Revenue: ₹5,112 crore, down 8.8% from ₹5,608 crore in FY23.
• Net Loss: ₹226.7 crore in FY24 compared to a loss of ₹125.01 crore in FY23.
• EBITDA: Marginally positive at ₹163.75 crore in FY24, recovering from a negative EBITDA of ₹-102.99 crore in FY23.

Business Segments

Cement Manufacturing

• Accounts for majority revenue share
• Produces wide range of cement grades
• Caters to housing, infrastructure sectors

Shipping

• Owns 3 bulk carrier vessels
• Transports raw materials and cement
• Helps optimize logistics costs

Power

• Captive power plants at cement units
• Waste heat recovery systems
• Also involved in wind power generation

Others

• Ready mix concrete units
• Property development project
• Chennai Super Kings cricket franchise

Competitive Advantage

Cost Efficiency

• Integrated plants ensure raw material security
• Waste heat recovery and captive power reduce costs
• Logistics optimization through shipping business

Quality

• Stringent quality control and testing
• ISO certifications validate quality commitment
• Trusted brands known for reliability

Distribution Reach

• Over 10,000 dealers and stockists
• Excellent penetration in key South Indian markets
• Own rail wagons improve market access

Technical Expertise

• In-house engineering and design capabilities
• Continuous R&D for product enhancement
• Advanced manufacturing processes

Growth Strategies

India Cements, being a historic powerhouse, is pursuing a strident growth strategy by increasing its production capacity as well as reinforcing its distribution framework in both old and new markets. For now, the firm is focusing on non cement businesses to tap into some existent synergies and starting to search for opportunities where it could diversify and make its position stronger. A commitment to brand loyalty and long-term business success paired with responsible environmental strategies display the effectiveness of its customer engagement initiatives. With respect to these multiple strategies, India Cements is ready for continuous development and dominance within the sector.

Industry Outlook

India's cement industry is poised for 7-8% growth, driven by:

• Government infrastructure projects
• Urban housing and real estate demand
• Growth in rural housing and construction
• Increased cement intensity, rising per capita consumption
• Higher demand from eastern and central regions

Key Risks and Challenges

• Raw material price volatility
• Power and fuel cost inflation
• Intense competition in South India
• Capacity underutilization during low demand
• Working capital intensive operations
• Foreign exchange fluctuations
• Execution risks in new projects

Brief Overview

With over seven decades of strong performance, extensive infrastructure, and trusted brands, India Cements is well-positioned to maintain its leadership in South India's cement industry. Its proactive capacity expansions, diversified product mix, and sustainability focus provide healthy revenue visibility even as it keeps risks well-managed. India Cements remains a key manufacturer enabling India's infrastructure growth story, which positively influences the India Cements share price.