India's Shree Cement beats Q1 profit view on strong domestic demand

BENGALURU, July 26 (Reuters) - Indian cement company Shree Cement Ltd (SHCM.NS) reported a bigger-than-expected 84% rise in first-quarter profit on Wednesday, helped by robust domestic demand.

The company reported a profit of 5.81 billion Indian rupees ($70.87 million) for the three months ended June 30, beating analysts average estimate of 4.29 billion rupees, according to Refinitiv IBES data.

The Kolkata-based companys gross revenue from operations rose more than 17% to 62.55 billion rupees.

Total expenses rose around 18%.

Both analysts and the companys management had anticipated strong demand in the quarter, driven by an increase in pre-election government spending.

Shree Cements managing director, Neeraj Akhoury, had said in the previous quarter that profitability began inching up as fuel prices declined after October 2022 and as the company executed several planned initiatives.

Analysts also said they believe Indias growing housing market, which typically accounts for 60% to 65% of the nations cement consumption, will continue to be a key demand driver for the cement industry.

In a separate filing, Shree Cement said it would invest 70 billion rupees in capacity expansion projects across states such as Rajasthan, Uttar Pradesh, and Karnataka, totalling 12 million tons.

Bigger peer Ultratech Cement (ULTC.NS) reported profit above expectations for the June quarter last week, helped by strong domestic demand.

Shares of Shree Cement, which is dealing with allegations of tax evasion worth 230 billion rupees, climbed as much as 2.8% to 24,340 rupees after the results were announced.

The stock fell 8.8% in the April-June quarter, while Ultratech rose 8.8%% compared with a 10.5% rise in the benchmark Nifty 50 (.NSEI).

($1 = 81.9850 Indian rupees)