Shri Keshav Cement Infra Ltd: In a Constantly Evolving Mode

Shri Keshav Cement Infra Ltd
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Shri Keshav Cement Infra Ltd., formerly known as Katwa Udyog Limited, operates two cement plants and Captive solar plant. It was started by well-known industrialist and visionary H D Katwa, who after trading for sometime as a trader in textiles, entered into cement arena by setting up a small mini plant of 30 Tones Per Day (TPD). Although he has retired from active participation in the company operations yet he is a guiding force behind the organization.

Now the company is led by Venkatesh H Katwa, and his brothers Vilas Katwa & Deepak Katwa who has wide experience in Cement industry, International business and Health Care service automations.

With Indian Economy & Market in a free-wheeling chat the dynamic entrepreneur Shri Venkatesh H Katwa shared ongoing ventures, his vision and future plans.

Shri Keshav Cement Infra Ltd

The CompanyShri Keshav Cement & Infra was incorporated in the year 1993 to manufacture Ordinary Portland Cement. Its IPO in 1995 and Rights Issue in 2019 was overscubscribed. The management has expanded the cement plant from 350 Tons per day to nearly 1100 tons per day. In addition, to prune the power cost of cement production, company set-up and commissioned 25 MWp Captive Solar plant at Koppal, Karnataka. The company has installed the latest PLC to ensure uniform flow of inputs and produce consistent product quality. Its captive solar plant significantly reduces the power cost by over 70%. Keshav Cement is probably the only Cement Plant is India to use 100% Green Power.

“We are looking to increasing the capacity 3 times to 1 million tons per annum”

In the Infra space you are one of the oldest companies with very rich experience. Please let us know how the journey was so far.

The journey of Shri Keshav Cement and Infra from 1995 till 2018 was navigated through rough edges due to 1980’s technology which was used for manufacturing cement. The plant was modernized in FY 2018. Journey of the company began with the purchase of a sick unit in 1994 and another sick cement plant in 2007 from Debt Recovery Tribunal. We inherited an obsolete technology cement plant which needed capital intensive imrpovements of technology to optimally utilize the resources, which required substantial funds. FY 2018 was an important year for the company – establishment 25 MW of Solar plant and for de-bottlenecking of cement plant at the cost of Rs 190 Crore. Cement plant was expanded from 0.10 million tons per annum (mtpa) to 0.35 mtpa. This led to jump in EBIDTA and margins. SKCIL established another 12 MW in FY 2022 to make it the only cement plant in the country running on 100% green power.

The company has a Captive solar plant. Taking into account the government focus on Green Energy do you have any plan to have any other verticals?

The company entered into Green Solar Energy at an opportune time. The power cost has been reduced as can be seen in the financials and with time after repayment is done, the power cost will be less than 5% of the market price. The management is actively looking to enhance the capacity of cement and stay focused on Cement and Solar power at this time. Other verticals in pipeline that management is conducting feasibility is Ready Mix Concrete plants and Cement related building materials.

Please let us know how Covid impacted the company.

Due to ongoing Covid, the company suffered limited impact since the housing construction was stopped completely which is a major contributor for cement consumption; however, the company utilized the closure time to make minor de-bottlenecking modifications at the plant. Solar plant continued to operate and the accumulated power was sold. Covid did not have any negative impact on Solar operations. The company took due care of employees during the Covid and provided necessary medical attention whenever necessary.

What are your future plans? Any new area you are planning to enter? And, if yes, how you are going to raise the capital?

Company has plans to increase the capacity of cement from 0.35 mtpa to 1mtpa. This project will focus on full and final optimization of fuel, power consumption and derive cost benefits on account of the economy of scale. This project is under feasibility study and will take around 14 months to complete from the first dig to the first dispatch of cement. This project will bring the fuel and power consumption in line with industry standards which is around 30-40% of our existing power and fuel consumption. The management projects to increase the EBIDTA margin PMT of cement from less than Rs 300 to over Rs 1000 PMT of cement.

How the company hopes to make a mark in the Aatmanirbhar story – the big infra story is developing fast.

Aatmanirbhar is a great thought of our Government and this will give necessary impetus to the local industry which will eventually develop into sustainable eco-system for businesses in all verticals. Over 99.5% of cement consumed is produced within country but cement uses petroleum coke and thus dependent on oil imports. We are investing in technology to use alternative fuel and studying the prospects of replacing fuel type from petroleum coke to hydrogen. Hydrogen can be produced by Solar energy.

Shri Keshav Cement Infra Ltd

Please discuss the business strategies, you applied, which made the phenomenal growth possible in such a competitive sector?

One of the successful strategy was to invest into Solar power generation which not only cuts the power cost but also contributed significantly to the EBIDTA and cash reserves of the company, hence the management is now looking to increase the capacity to 1 mpta. This will further optimize fuel and power costs while giving economy of scale benefits, similarly enjoyed by most of the cement plants. This in turn will increase the shareholders wealth.

EBITDA (Rs. Crore)
FY-16 15.09
FY-17 12.56
FY-18 7.69
FY-19 25.69
FY-20 27.08
FY-21 26.55
FY-22 37.65
About the author: IE&M Team
IE&M Team
Indian Economy & Market is an Indian media and information platform producing data-backed news and analysis on all the vital elements at the intersection of the economy, stock markets, mutual fund, insurance, commodities, currency, technology, startups and business.

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