JKCEMENT - J.K. CEMENT LTD Share Price

The management of JK Cement outlined a positive outlook for the company during the Q1 FY26 earnings call held on July 21, 2025. Net sales for the quarter reached Rs. 3,028 crores, reflecting a 19% year-on-year growth but a 6% decline compared to the previous quarter. EBITDA stood at Rs. 674 crores, marking a significant 41% increase compared to the prior year, although it decreased by 9% sequentially. The EBITDA margin was 22.3%, higher than the previous year's 18.7% but slightly down from 22.8% in the prior quarter. Per ton EBITDA was Rs. 1,247, compared to Rs. 1,014 in the same quarter last year and Rs. 1,265 in Q4 FY25.

Management highlighted a 15% growth in grey cement volume year-on-year, particularly strong in Central India, where sales increased by over 50%. The company registered an 8% growth in white cement. Capacity advancements included the completion of de-bottlenecking at the Ujjain unit, bringing total grey cement capacity to 25.26 million tons. Additional expansions of 6 million tons are underway, and the company has allocated Rs. 195 crores for a 6 lakh tons increase in putty capacity in Rajasthan.

On the debt front, gross debt stood at Rs. 5,203 crores with cash reserves of Rs. 2,407 crores resulting in a net debt of Rs. 2,796 crores. Notably, the net debt to EBITDA ratio was 1.29, maintaining stability.

Looking ahead, the company reaffirmed its guidance of approximately 20 million tons in volume growth for FY26 and aims to achieve a green power capacity of 75% by 2030, with 60% expected by FY26. The management expressed confidence in maintaining a sustainable EBITDA growth trajectory and indicated plans to expand additional projects in the coming years, potentially initiating multiple projects simultaneously.

Here are the major questions and their detailed answers from the Q&A section of the JK Cement earnings transcript:

1. Question: "Could you let us know what was the incentive booked in the quarter?" Answer: "The incentive for the quarter was Rs.85 crores. Previously, the guidance was between Rs.75-80 crores, but given the lower volumes in QOQ, we exceeded that."

2. Question: "What would be our guidance or outlook for FY26 as a whole in terms of volume growth?" Answer: "We maintain our guidance of about 20 million tons for FY26, despite strong Q1 numbers, due to expected lean periods during the monsoon."

3. Question: "Can you quantify sales from the recent acquisitions, specifically Toshali and Saifco?" Answer: "We see potential in Toshali for 2.5 to 3 million tons if limestone ties up successfully. At Saifco, we estimate an immediate upgrade of 300-400 tons per day."

4. Question: "What was the regional breakup of sales volumes for Q1?" Answer: "We're not sharing exact regional numbers. However, we've seen over 50% growth in Central India, aided by our expanded dealer network."

5. Question: "How was the pricing movement compared to last quarter, excluding clinker volumes?" Answer: "Overall, cement prices have remained flat. The South saw an increase in realizations, which offset slight declines in the North and Central regions."

6. Question: "What improvements do you foresee in non-trade pricing versus trade pricing?" Answer: "There's been a recent uptick in non-trade pricing due to government spending, but the differential from trade pricing stabilizes around Rs.20-25 per bag."

7. Question: "What's the total capacity at Panna after the expansion?" Answer: "After expansion, the capacity at Panna will be 7.3 million tons, comprising 4 million tons from Line 2 at 12,000 TPD and 3.3 million tons from Line 1."

8. Question: "Will the new grinding unit in Bihar have incentives?" Answer: "Yes, there is an incentive scheme applicable once we commission the new grinding unit in Bihar, where we've already applied."

9. Question: "Can you elaborate on the EBITDA guidance moving forward?" Answer: "We're working towards an EBITDA per ton growth reflective of industry trends. We're focused on maintaining improvements as we expand capacity."