Shree Cement Is Looking to Replicate the Success It Had in the North in Newer Markets of South and East India. Will the Magic Formula Work?
There is no more than a hint of a grin on Prashant Bangur’s face when you question him about his strategy. Almost instantly, the conversation goes back to 2003, when as a freshly minted 22-year-old MBA graduate, he was sent to Shree Cement’s plant in Rajasthan’s Beawar. At that point in time, Shree Cement was a company with a two million tonne capacity and revenues of ₹484 crore, with a net profit of just ₹6.70 crore. More worryingly, there was a debt of ₹360 crore on the balance sheet. “We decided to go in for an expansion in 1998 and the market collapsed. Till 2003, we were in the middle of a debt trap and our strategy was only to survive,” he says slowly.
Since then, the company, where he is now the joint managing director, has come a long way. From that troubled phase at the turn of the century, the Kolkata-headquartered Shree Cement has now grown into a ₹5,731 crore entity with a net profit of ₹455 crore and a debt of ₹520 crore, making it among the most well run companies in the sector. Its operating margin at 25% is significantly higher than its competitors such as, UltraTech (20%) and Ambuja Cements (18%) (see: Cutting edge).
This story is from the May 2017 edition of Outlook Business.
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This story is from the May 2017 edition of Outlook Business.
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