JKLAKSHMI - JK Lakshmi Cement Limited Share Price

In the earnings conference call held on February 4, 2026, management provided a cautious outlook for JK Lakshmi Cement. Key highlights include:

1. Volume Recovery and Pricing Expectations: Management indicated a temporary dip in trade shares due to increased non-trade sales in Gujarat and the recent commencement of their Surat grinding station. They anticipate a recovery in trade volumes, asserting that December and January saw improved performance, surpassing prior levels.

2. Financial Projections: Management expects substantial pricing improvements in both trade and non-trade segments, driven by strong demand and rising fuel costs. They predict that trade prices will increase in line with stronger demand and the cost pressures coming from fuel prices.

3. CAPEX Plans: For the Durg Line-2 project, they confirmed an incurred CAPEX of approximately Rs.260-Rs.400 crores for the current financial year from an overall planned budget of Rs.3,000 crores, with further expenditures anticipated. They expect to complete the entire project by March 2028.

4. Clinker Production and Utilization: The company reported clinker production of 151,000 tonnes in Q3 FY26, with a utilization rate of 90%. They aim to enhance clinker utilization further.

5. Employee Costs and Productivity: Ongoing productivity improvement efforts have led to a reduction in employee costs, and management aims to stabilize these costs rather than cut salaries.

6. Realizations Impact: Management acknowledged even stronger price drops in non-trade segments, particularly in Gujarat, due to market dynamics post-GST changes but remained optimistic about a recovery in realizations, projecting potential improvements and growth in volumes, with double-digit increases expected in Q4.

Management also highlighted that they are continuously adapting their operational strategy in response to market dynamics and remain committed to achieving long-term growth targets while strategically investing in capacity expansion.

Q1: Your trade share has fallen quite a bit on a quarter-on-quarter basis in your overall volume, trade cement sales. So, can you explain why this has happened?

A1: The drop in trade sales in Q3 was due to two main reasons: First, our volume in Gujarat increased significantly, particularly after commissioning our Surat grinding station on September 22, 2025. The demand surged in Gujarat, a predominantly non-trade market. Consequently, our trade share decreased from 53% to 49%, reflecting this shift.

Q2: Why would our trade volumes on a year-on-year basis decline?

A2: The decline in year-on-year trade volumes can be attributed to confusion post GST reduction on September 22, which led to significant price drops. This period saw decreased labor availability due to extended rains and elections in Bihar, affecting on-site construction. Consequently, demand shifted to non-trade segments, leading to a decline in trade volumes.

Q3: Can we confirm that this situation was temporary and that our trade share should return to decent levels?

A3: Yes, from December and January, we have seen a recovery, with trade volumes rebounding even stronger than before. The situation was indeed temporary, and we have regained trade share during this period.

Q4: Can you throw some light on the pricing scenario in your respective markets during Q3?

A4: In our key markets, particularly Gujarat, we observed sluggish demand post GST reduction, impacting trade pricing significantly. Non-trade prices were more affected due to our higher dependency on them. Currently, as of January, non-trade prices have improved, and we expect trade prices to follow suit as demand strengthens.

Q5: Should we assume that employee costs will remain at around Rs. 150-120 crores moving forward?

A5: Our goal is to maintain or reduce employee costs through improved productivity across our sites. While we continue to optimize labor efficiency, expect costs to stabilize rather than further decline as new projects are launched.

Q6: Could you provide the CAPEX incurred for the Durg Line-2 project?

A6: So far this fiscal year, we have incurred about Rs. 250-260 crores on Durg Line-2. We plan to spend another Rs. 400 crores by the end of this financial year, totaling approximately Rs. 650-660 crores for FY26.

Q7: What is the expected commissioning timeline for Durg Line-2?

A7: The entire Durg project, including the clinker and grinding units, is scheduled to be completed by March 2028, ensuring we meet our expansion targets.

Q8: What is the clinker utilization level for this quarter?

A8: Our clinker utilization for this quarter has been 90%, indicating that we are operating at a high capacity to meet demand.

Q9: How is the demand and pricing outlook for Q4?

A9: We anticipate double-digit growth in demand for Q4. While non-trade prices have improved, trade prices are expected to rise due to strong demand and increasing fuel costs, benefiting our revenue outlook.

Q10: Could you clarify the fall in realizations and its impacts relative to your peers?

A10: The significant fall in our realizations was primarily influenced by our heavy reliance on the non-trade market in Gujarat, which faced price reductions. As local demand shifts and recovers, we expect realizations to stabilize as the market improves over the coming quarters.