Shree Digvijay Cement (SHREDIGCEM) Q2 FY27 Swings to Loss as Surging Costs Overwhelm Record Volumes
The company's revenue jumped 73% from last year, but a sharp spike in fuel and freight costs pushed it into a net loss for Q2 FY27.
Shree Digvijay Cement posted a net loss of ₹16.27 crore in Q2 FY27 despite a 73% surge in revenue. Soaring input costs and a seasonal plant shutdown erased profits from strong volume growth.
For cement makers, the second quarter is a seasonal test. Monsoon rains typically soften demand, but this year, the real pressure came from global supply chains. Shree Digvijay Cement passed the volume test with flying colors but failed on costs, swinging to a loss as inflation bit deeper than expected.
The numbers tell a story of two diverging lines. Revenue soared 73% year-on-year to ₹279.31 crore, yet net profit collapsed to a loss of ₹16.27 crore from a ₹10.22 crore profit a year ago. Sequentially, the picture darkened: revenue fell 17% from a strong Q1, and profit plunged from a positive ₹6.82 crore into the red.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 279.31YoY +73% | 337.27 | 161.35 |
| Profit (₹ Cr) | -16.27YoY -259% | 6.82 | 10.22 |
| Net Profit Margin | -5.8%YoY -192% | 2.0% | 6.3% |
Why the bottom line disappeared
The loss was not due to weak demand. According to a report in The Hindu BusinessLine, sales volume leapt 72% to 5.10 lakh tonnes. A key driver was new sales under a brand agreement with Hi-Bond Cement. The problem was that costs rose faster than prices could follow.
Management, in a press release cited by The Hindu BusinessLine, blamed geopolitical uncertainty for disrupting supply chains. This spiked costs for fuel, packaging, and freight. An annual plant shutdown during the quarter added further pressure on fixed costs. The result was an EBITDA loss of ₹1.30 crore, a dramatic fall from a ₹20.48 crore profit last year.
The cost wall ahead
This is an industry-wide squeeze. Reports from Financial Express note that pan-India cement prices were soft in Q2, even as fuel costs kept climbing. For Shree Digvijay, the pressure is amplified by a leveraged balance sheet. The company carries a debt-to-equity ratio of 1.4, which Equitytale.com flags as high.
Higher interest costs on that debt compound the margin pressure from operations. With net debt reported around ₹509 crore as of March 2026, the company's ability to absorb cost shocks is more limited than less-indebted peers.
Levers for recovery
Management points to its growing blended cement portfolio and renewable energy expansion as paths to better margins. The plant is also now operational post-shutdown, ready for higher demand. The broader sector expects a demand pickup in the second half of the fiscal year, supported by infrastructure spending.
However, the near-term outlook remains cautious. Industry reports suggest fuel cost guidance from larger peers points to continued inflation into Q3. For Shree Digvijay, a sustained recovery hinges on its ability to pass these costs through via price increases in its regional markets, a move that is never guaranteed in a competitive landscape.
Key Points
- Revenue grew 73% year-on-year to ₹279.31 crore, driven by a 72% jump in sales volume.
- The company swung to a net loss of ₹16.27 crore from a profit of ₹10.22 crore in Q2 FY26, as input cost inflation overwhelmed top-line growth.
- Soaring costs for fuel, packaging, and freight, coupled with an annual plant shutdown, caused EBITDA to turn negative.
- A high debt-to-equity ratio of 1.4 leaves the company with less cushion to weather prolonged cost pressure.
- Management sees margin recovery levers in renewable energy and a premium product mix, but near-term profitability depends on cement pricing holding up.
Hexa Perspective
This quarter underscores the vulnerability of regional cement players to input cost volatility. Shree Digvijay's volumes prove demand is not the issue; the model works when costs are stable. The problem is that costs are not stable, and its financial structure offers little room for error.
The path back to profitability is narrow. It requires either a meaningful and sustained drop in fuel prices or successful price hikes in its core Gujarat market, where Financial Express reported prices were flat in September. Until one of those conditions is met, margins will stay under siege, making the recent loss more than a one-quarter event.
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