JKCEMENT - J.K. CEMENT LTD Share Price

The management of JK Cement Limited provided an optimistic outlook during the earnings conference call for the fourth quarter and year ended March 31, 2026. Key highlights include a 15% increase in net sales for Q4 to INR 3,614 crores compared to INR 3,132 crores in the previous quarter, and a year-on-year increase of 16%, from INR 10,802 crores to INR 12,568 crores for the full year. The EBITDA for Q4 rose by 25% to INR 670 crores, while year-on-year EBITDA increased by 18% to INR 2,318 crores.

Despite these gains, EBITDA margins fell to 18.5% compared to 22.5% year-on-year. The profit after tax for Q4 was INR 345 crores, a 91% increase sequentially but 17% lower than the previous year. For the full year, profit after tax stood at INR 1,033 crores, a 21% increase from INR 851 crores in FY25. The company proposed a dividend of INR 20 per share.

Looking ahead, management expects a double-digit growth in gray cement volumes for FY27, anticipating market growth of 6% to 8%, targeting an incremental addition of 2.5 million tons in volumes. They also guided for a capital expenditure range of INR 3,500 crores to INR 4,000 crores for FY27 and INR 1,500 crores to INR 2,000 crores for FY28, mainly to support ongoing expansions, including the new greenfield project in Jaisalmer.

Management confirmed their confidence in achieving a capacity of 50 million tons by FY30, barring any significant geopolitical challenges. The continued investment in branding and operational efficiencies indicates a proactive approach to sustain market position amidst increasing competition.

Question 1: "Sir, my first question pertains to the employee expenses. So it grew 25% Y-o-Y. So I believe majority of this inflation could be attributed towards the commissioning of the grinding units. But was there any other one-off expenses included in employee expenses because there is approximately INR32 crores of sequential rise in the expense cost?"

Answer: Yes, the increase in employee expenses is largely due to the commissioning of the new grinding units, where earlier salaries were capitalized and have now moved to revenue. Additionally, we had normal increments, increased manpower requirements, and one-time liabilities for leave travel assistance. This totalled to about INR32 crores.

Question 2: "So sir can we safely assume a sustainable run rate of INR260 crores going ahead, or is there some dilution provided your dilution in these employee expenses?"

Answer: We believe a sustainable run rate would be around INR250 crores. However, considering annual increments and increased manpower for the new projects, we anticipate there will be a year-on-year increase of 12% to 14%, making the full-year number approximately INR937 crores.

Question 3: "So what is the component of the packing cost in the INR80 crores rise in the other expenses cost?"

Answer: The increase in packing cost was mainly driven by two factors: increased volumes and higher prices. The combined impact of these factors accounted for approximately INR30 crores of the rise in other expenses.

Question 4: "What is the guidance for capex for FY27 and FY28?"

Answer: For FY27, we anticipate capex to be in the range of INR3,500 crores to INR4,000 crores. For FY28, we estimate capex to be between INR1,500 crores and INR2,000 crores.

Question 5: "On the incentives, what was the incentive accrued in Q4, and what is the outstanding on books as of March?"

Answer: The incentive accrued in Q4 was approximately INR29 crores, while the outstanding amount on March 31 was close to INR300 crores. For FY27, we expect the incentive to be around INR250 crores to INR260 crores once we receive the sanction letter for certain states.

Question 6: "Can you provide an outlook for white cement volumes for FY27?"

Answer: We expect to meet all domestic demand for white cement from our local production. With the current geopolitical circumstances, we've transitioned supply from our UAE plants to the Gotan plant, ensuring no loss in market share.

Question 7: "What is the expected profit margin from the paint business for FY27?"

Answer: For FY27, we are targeting a revenue of around INR500 crores to INR550 crores from the paint business and expect it to breakeven with improved gross margins throughout the year.

Question 8: "Do you see any kind of pre-monsoon price hike due to cost increases?"

Answer: Yes, in light of cost increases, we will attempt to pass these costs onto our customers prior to the monsoon period. We are actively monitoring possible price adjustments as necessary.

Question 9: "How much has the recent increase in diesel prices impacted freight costs?"

Answer: The recent diesel price increase may result in a freight cost impact of about INR10 per bag. However, we are still evaluating how much of the cost can be passed on, depending on market dynamics in the coming months.

Question 10: "When do you expect to reach your green power target of 75%?"

Answer: We anticipate reaching the 75% green power target once our new projects are commissioned, which will happen progressively over the next few years, primarily by FY28.