Shree Cement to set up a ₹2,000 crore plant in Maharashtra

Shree Cement Ltd will invest ₹2,000 crore to set up a new plant in Maharashtra, India’s third-largest cement maker announced on Friday at the World Hindu Economic Forum (WHEF) 2025.

The letter of intent (LoI) for the proposed investment was signed in the presence of Maharashtra chief minister Devendra Fadnavis in Mumbai.

“We will set up a 2 million tonnes per annum (mtpa) plant in Maharashtra. We have already finalized and acquired land in Chandrapur district,” Hari Mohan Bangur, chairman of Shree Cements, told Mint on the sidelines of the WHEF. “We are awaiting environmental clearance. It is in the process. After it is cleared, it will take two years for the plant to come up,” Bangur said.

The company will use its cash reserves to fund the expansion. It had a cash balance of ₹6,541 crore at the end of 2024-25.

At present, Shree Cement has a capacity of 62.8mtpa. In the second quarter of 2025-26, the company commissioned a 3.65 mtpa clinker unit at Jaitaran, Rajasthan, and the 3 mtpa cement mill is expected to start there shortly. A 3 mtpa integrated plant at Kodla (Karnataka) is in the final stages and will be commissioned within the third quarter of 2025-26.

The cement maker’s capacity will be rising to 68.8 mtpa post ongoing expansions, according to a 29 October ICICI Direct Research note.

By FY27E, capacity is expected to reach between 72-75 mtpa, with further scope to reach 80 mtpa by FY28E or FY29E, depending on demand trends, analysts at ICICI wrote in their note.

“There is a medium-term risk as industry capacity expansions are likely to outpace demand increase through FY28-29. That risk is the highest in North and West as significant new capacity is expected to come in western and northern India. However, cement prices have declined sharply in 3Q, especially in the eastern and southern regions. There could be some recovery in pricing from January onwards, especially in South and East,” said Satyadeep Jain, lead analyst for cement, metals, mining & utilities at Ambit Capital.

Industry capacity boost

The announcement follows recent capacity expansion plans by India’s largest cement players. On 18 October, UltraTech Cement, the country’s biggest cement maker, increased its capacity target from 167 mtpa to 240 mtpa by 2027-28. Days later, on 3 November, the Adani Group raised its cement manufacturing capacity target by nearly 10% to 155 mtpa by 2027-28.

Shree Cement posted a 15% jump in revenue to ₹4,303 crore during the September quarter compared to the year-ago quarter. This was driven by “volumes, premiumization push, and value over volume strategy”, the company said in a statement.

The company’s chief financial officer, Ashok Bhandari, during the second quarter’s earnings interaction with analysts, guided for capital expenditure of about ₹3,000 crore in FY26-27, and expects FY27-28 capex to remain broadly in the same range.

Shares of Shree Cement closed 0.18% lower on Friday, while the benchmark Sensex closed 0.53 higher.