Shree Cement is currently evaluating at least two to three assets for acquisition as a geographical fit as it pursues 80 million tonne (mt) of production capacity while continuing to maintain its cost leadership, managing director Neeraj Akhoury said.

"I think we have got this reputation that we don't look at opportunities. In fact, we look at all the opportunities that come up in the market," Akhoury told ET in an exclusive interaction. "Some parts of the country have higher utilisation levels and some may have lower, but all parts of India are equally attractive," he said.

The past couple of years have seen a host of smaller and mid-level cement assets being acquired by Adani Cement and the Aditya Birla Group's UltraTech Cement. The country's third-largest producer of cement has stood out as its last acquisition came a decade ago. Not that it is not growing. From a little over 40 mt in fiscal 2020, the company is set to have 71 mt of production capacity by September this year, with a target of 80 mt by fiscal 2028. The company is also looking at augmenting its market share to around 10% from around 8% currently.

While the "right opportunity" will make it easier to press the pedal on growth, Akhoury is equally sure that growth has to be profitable. "We should be razor sharp that we should not only play for the size, we should play for the value that (it) brings to the shareholders," he said.

Adding capacity through the brownfield route works out to be the most cost-effective, followed by setting up a greenfield unit, while an acquisition is typically the most expensive.

"Capex per ton is a major driver, where $110-120 (per tonne) would be a typical acquisition cost if not higher than that, but you can do a greenfield in around $75 (per tonne), so that itself is a great advantage when it comes to capex," Akhoury said.

Most cement plants which are currently on the block are at least two decades old, and that itself leads to an additional cost of at least ₹150-200 per tonne vis-a-vis a recently built plant, Akhoury explained.

The cement industry uses enterprise value/earnings before interest, tax, depreciation and amortization (EBITDA) to gauge the cost of production of each tonne of cement. At an EBIDTA of more ₹1,400 per tonne in the March quarter, the company has the highest profitability in the industry, about one third more than the next . "There is always an advantage of having your own plant because you design a plant for a particular cost level, and in an acquisition, that part gets slightly compromised," he said.

"We are very firm that for an asset, a value above this is a no and below this is something that we would like to talk," he affirmed.

The company will fiercely protect its position as the lowest cost producer, and this cost competitiveness has also allowed it to clock in a higher EBITDA on each tonne of cement sold.