Shankara Building Products Limited — PPTs, 16-05-2025: Investor Presentation

1. Financial Highlights:

Shankara Building Products reported record FY25 revenues of ₹5,697 Cr, up 18% YoY, driven by steel sales of ₹5,101 Cr (+17%) and non-steel ₹595 Cr (+26%). Steel volumes rose 29% to 8.43 lakh tonnes, beating targets. Q4 EBITDA margin held steady at 3.20% despite inventory losses from steel price declines. PAT increased 17% YoY in Q4 with a sharp 61% QoQ rise. Annual PAT margin was 1.36%, slightly down on higher cost pressures. Operating cash flow remained strong at ₹90 Cr pre-tax. Working capital days improved slightly to 30.

2. Strategic Initiatives & Growth Drivers:

Focus is on crossing 1 million tonne steel volume in FY26 with expansion in pipes, flats, roofing, plus non-steel growth in sanitaryware and PVC pipes. Marketplace growth is fueled by omni-channel penetration—retail, channel, enterprise—and upgrades with 18 hybrid and 13 dedicated non-steel stores. Digital platform buildpro.store is being scaled. Capex is selective, targeting better capacity utilization (~50%) and margin improvement.

3. Business Developments:

The ongoing demerger of marketplace and manufacturing businesses aims to unlock value. Marketplace revenues stand at ₹5,267 Cr with RoCE near 30%; manufacturing at ₹1,362 Cr with RoCE around 3%. Separation allows focused management and margin enhancement. Supplier tie-ups with 100+ brands across steel, plumbing, electricals, and sanitaryware strengthen offerings.

4. Market Position & Competitive Advantage:

Shankara is a leading building materials marketplace in India with 92 stores, 32 fulfillment centers, and 5.1 lakh sq.ft retail space. Its broad product mix and strong South India base, combined with growing presence in West and Central India, provide scale and distribution edge. Omni-channel and cluster-based approaches enable quick delivery and superior customer experience, reinforcing leadership.

5. Investor Implications:

Robust volume growth, diversification, and efficiency gains point to positive growth potential, driven by marketplace scalability and non-steel margin expansion. Demerger should sharpen focus and returns, enhancing investor value. Execution risks include margin stability amid steel price swings and integration of growth plans. Overall, the company is positioned for healthier, growth-oriented performance.