Is Hemadri Cements a Good Buy?

Hemadri Cements, once a functioning player in the cement industry, now finds itself in a deeply distressed financial and operational position. What was once a ₹71 crore company in terms of revenue back in FY2014 has now diminished to a shadow of its former self—with FY2025 revenues collapsing to just ₹8 crore. The steep fall in top-line performance over the past decade paints a grim picture of business viability, competitiveness, and long-term sustainability. 

Sharp Revenue Decline: From ₹71 Cr to ₹8 Cr

One of the most obvious and worrying signs of the company's downfall is the 90% drop in revenue over a 10-year period. While the cement sector in India has generally grown due to infrastructure spending and real estate development, Hemadri Cements has clearly failed to capitalize on this trend. A drop from ₹71 crore in 2014 to ₹8 crore in 2025 points to severe erosion of market share, operational inefficiencies, and potentially loss of core customer segments. Such a drastic fall indicates either a shrinking product demand, poor management, or both.

Voluntary Liquidation Under IBC

Perhaps the most damning development is the company’s decision to enter voluntary liquidation proceedings under the Insolvency and Bankruptcy Code (IBC) as of July 2025. Voluntary liquidation is a formal declaration by a company that it is no longer capable of continuing operations and is choosing to wind up its affairs. This step typically follows prolonged periods of loss, unsustainable debt, or a complete breakdown in operations.
This move confirms the company’s insolvency—legally, operationally, and financially. Any residual hope of a turnaround is essentially extinguished once a company enters liquidation unless rescued by a rare strategic acquisition or resolution plan.

Troubled History with Compliance and Trading Suspension

Adding to the governance red flags is the fact that Hemadri Cements was previously subject to a trading suspension, which was only lifted in April 2023. Although the specific reasons were not detailed, trading suspensions on Indian stock exchanges are usually enforced due to serious lapses in regulatory compliance, such as delays in financial reporting, failure to meet listing obligations, or concerns over liquidity and disclosures.
Such regulatory setbacks significantly erode investor confidence and are often precursors to deeper financial or legal trouble—something that eventually materialized with the IBC proceedings.

Highly Inefficient Working Capital Metrics

Despite being a manufacturing entity, Hemadri Cements has failed to manage its working capital efficiently, as seen in the alarming inventory and payable metrics:
Inventory Days exceed 500 days, indicating that products are either not being sold at all or are grossly overstocked.

Cash Conversion Cycle (CCC) is extremely high, a sign of poor liquidity management
Days Payables Outstanding (DPO) is also elevated, implying that the company is delaying payments to suppliers—often a sign of cash flow stress
High inventory and delayed payments signal that the company’s day-to-day operations are dysfunctional, and it is relying heavily on credit without the ability to generate cash internally.

Conclusion

Hemadri Cements is in a critical state of decline. The company’s revenue collapse, voluntary liquidation, prior trading suspension, and working capital mismanagement combine to create a situation of total financial instability and operational paralysis. The company no longer demonstrates any of the key attributes necessary for a viable, investable business—namely, growth, profitability, or transparency.