• Total capacity now stands at 5.2 million tons (3 million tons own grinding + 2.2 million tons Highbond distribution rights)
• Commissioned new 1.5 million ton grinding unit in October 2024, previously operating at 90-95% capacity utilization
• Secured exclusive distribution agreement with Highbond Cement at cost plus 500 rupees per metric ton, expected to generate 200-250 rupees EBITDA per ton
• Combined market share in Gujarat at 9-10% (5% Digvijay + 4% Highbond) targeting increase to 14-15%
• Limestone reserves of 25 million tons with recent acquisition of 20 million tons of additional reserves
• Jetty operational handling 2-2.5 million tons of cargo annually with discussions ongoing for commercial cargo with Reliance and other parties
• Dominant 90% market share in ONGC oil well cement segment, contributing 15% of total sales revenue
• Focusing on blended cement portfolio (composite, slag, PPC) targeting 55% of product mix to optimize clinker factor

Shree Digvijay Cement is positioned for significant capacity expansion with recent addition of 1.5 million tons grinding capacity and exclusive distribution rights for Highbond Cement's 2.2 million tons capacity, bringing total capacity to 5.2 million tons. Management is optimistic about Q4 FY26 and FY27 with price increases of 25-30 rupees per bag implemented in Gujarat market, targeting 70% capacity utilization in FY27 (approximately 3.5 million tons volume) with strong demand outlook driven by infrastructure projects.

Management did not disclose specific Q4 FY26 financial results but indicated pricing improvement with gross price increases of 30-40 rupees per bag and net price increases of 25-30 rupees per bag in Gujarat market compared to Q3. Current annual sales volume approximately 2.4 million tons from both companies. Total debt expected at 450 crores as of March 31, 2026, comprising existing term loan of 130 crores and new loan of 366 crores for Highbond transaction, at effective interest rate of 8.7%. Annual debt repayment of approximately 24-25 crores planned, reducing net debt by similar amount in FY27. Oil well cement segment contributes 15% of sales revenue with 7-8% contribution to volumes.

Management displayed confident and optimistic tone, emphasizing that FY27 will be significantly better than the challenging FY25-26 period which saw good demand but weak pricing. CFO Vikas Kumar highlighted that pricing is at multi-year lows and Q4 FY26 marks inflection point with upward pricing trend expected to continue in Q1 FY27. Management emphasized the company operates on processes rather than promoter-driven model, providing continuity despite ownership changes. Strategic focus on blended cement portfolio to reduce clinker intensity and optimize margins was repeatedly highlighted. The team expressed confidence in achieving double-digit volume growth and maintaining financial covenants despite increased debt from Highbond transaction. Management stressed Gujarat market's strong fundamentals with 32 million ton annual demand growing 8-10% driven by infrastructure projects in Rajkot, Junagad and surrounding areas.

Primary challenge is increased dependence on market-sourced clinker (800,000-900,000 tons annually) to support expanded grinding capacity, which will impact EBITDA by approximately 200 rupees per ton compared to integrated operations. Geopolitical concerns affecting Brent crude prices pose cost inflation risks, particularly for fuel and power costs in this energy-intensive industry, though management expects impact only from Q1 FY27. Recent ownership changes with India Resurgence Fund acquiring stake from Bain Capital creates uncertainty around long-term strategic direction, though current chairman's tenure extended to 2030. Highbond facility currently operates at only 45% utilization (1 million tons of 2.2 million capacity) and lacks captive limestone mines, requiring market sourcing. Supply chain disruptions from geopolitical tensions could affect clinker imports from UAE, though management maintains adequate inventory buffers. Cost pressures cannot be fully passed through to customers given the cyclical nature of cement industry and recent weak pricing environment. Commercial cargo opportunity at jetty remains unrealized with no confirmed deals despite discussions with Reliance and other parties.

Revenue Outlook: Targeting volume growth of 8-10% in Q4 FY26 vs Q3; industry expected to grow 7-8% with company targeting 150-200 bps outperformance

Margin Outlook: Pricing expected on upward trend in Q1 FY27 after multi-year lows; no cost impact expected in Q4 FY26, potential fuel cost pressures from Q1 FY27 onwards

Key Targets:

• 70% capacity utilization in FY27 (approximately 3.5 million tons volume)
• Market share expansion from 9-10% to 14-15% in Gujarat
• Blended cement portfolio to reach 55% of product mix
• Annual debt reduction of 24-25 crores through term loan repayment
• Evaluate greenfield clinker expansion when reaching 75% capacity utilization

The Q&A session revealed investor focus on three primary areas: capacity expansion economics, pricing recovery trajectory, and strategic rationale for the Highbond arrangement. Multiple analysts probed the EBITDA impact of purchasing market clinker (200 rupees per ton) and management's mitigation strategy through product mix optimization toward blended cements. Significant attention on volume guidance with management confidently projecting 70% FY27 utilization (3.5 million tons) versus current 2.4 million tons, representing approximately 45% volume growth. Analysts questioned pricing power sustainability with management emphasizing cyclical recovery from multi-year lows and 25-30 rupees per bag increases already implemented. Concerns raised about ownership changes and strategic direction, with management reassuring on process-driven operations and chairman tenure through 2030. The Highbond transaction structure (cost plus 500 rupees) was viewed favorably though questions about low current utilization (45%) and lack of captive limestone at Highbond facility indicated execution risks. Jetty commercialization potential discussed but lack of concrete timeline disappointed some participants. Overall, management displayed confidence in recovery trajectory while acknowledging near-term cost pressures from geopolitical factors affecting fuel and clinker sourcing. Analysts appeared cautiously optimistic about volume growth potential but concerned about margin sustainability given clinker sourcing challenges and debt increase.