J K Cements — Q1 FY26 earnings call

Call held 21 Jul 2025

Management summary

J K Cements reported a strong Q1 FY26 with net sales up 19% YoY to ₹3,028 crores and EBITDA up 41% YoY to ₹674 crores, driven by robust grey cement volume growth of 15% YoY. However, sequential performance saw a dip in sales and EBITDA by 6% and 9% respectively. The company completed Ujjain de-bottlenecking, bringing total grey cement capacity to 25.26 MT, and progressed on its 6 MT expansion plans, while also noting potential challenges in Q2 due to higher costs and marketing spends.

Highlights

  • Net sales grew about 19% year-on-year at ₹3,028 crores.

  • EBITDA increased 41% year-on-year to ₹674 crores.

  • EBITDA margin expanded to 22.3% from 18.7% YoY.

  • Grey cement volume grew 15% year-on-year, driven by over 50% growth in Central India.

  • White cement volume grew 8% year-on-year.

  • Consolidated grey cement capacity reached 25.26 million tons after Ujjain de-bottlenecking.

  • Acquisition of Saifco completed, now a subsidiary.

Concerns

  • Net sales de-grew by about 6% quarter-on-quarter.

  • EBITDA dipped 9% quarter-on-quarter.

  • EBITDA margin compressed to 22.3% from 22.8% QoQ.

  • Some de-growth in the North due to market conditions.

  • White cement margins declined sequentially, though now stagnated in the 15-20% range.

  • Q2 is expected to be a tough quarter due to scheduled kiln maintenance and increased marketing spends.

  • Power and fuel costs increased due to higher pet coke prices and balanced clinker production.

  • Freight costs increased by ₹5-6 per ton due to longer lead distances for Bihar markets.

Key financials

  1. Net Sales ₹3,028 Cr +19%YoY
  2. EBITDA ₹674 Cr +41%YoY
  3. EBITDA Margin 22.3%
  4. EBITDA per ton ₹1,247
  5. Grey Cement Volume Growth 15%
  6. White Cement Volume Growth 8%

What they filed

Q1 FY27: revenue up 20.3%, net profit down 15.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,560 2,930 3,581 3,353 3,019 +18%3,463 +18%3,888 +9%4,032 +20%
EBITDA284 492 765 688 447 +57%557 +13%682 −11%648 −6%
Net profit136 190 361 324 159 +17%174 −8%331 −8%275 −15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Paint Business
    ₹86 Cr Turnover (Q1 FY26)₹273 Cr Turnover (FY25)30% Gross Margin₹10 Cr EBITDA Loss (Q1 FY26)₹45 Cr EBITDA Loss (FY25)

Capital allocation

high confidence
  • Capex ₹350 Cr this quarter · ₹2,000 Cr (FY26) planned
    • Putty expansion (6 lakh tons) ₹195 Cr
    • Normal CAPEX and putty expansion (FY27) ₹600 Cr
    • Paint capacity (total investment) ₹450 Cr
    Sanjeev Singh: "And secondly, in this quarter, we have a spend closer to 350-400 crores in our CAPEX. So, how should we look at full year numbers in FY26? Will it be closer to 1,700 crores and also, if you can guide on FY27 numbers? Thank you." Management: "So, in this year, it will be close to 2000 crores and next year, presently we have these plans for the normal CAPEX and the putty expansion, what we have announced. So, for all that, it should be close to 600 crores as of now."
  • Debt Gross ₹5,203 Cr · Net ₹2,796 Cr · 1.3× EBITDA
    Management: "The balance sheet position is that the gross debt as on 30th June stood at Rs. 5,203 crores as compared to Rs. 5,101 crores as on 31st March. The cash was Rs. 2,407 crores as compared to Rs. 2,536 crores. The net debt was higher at Rs. 2,796 crores as compared to Rs. 2,565 crores as on 31st March. The net debt to EBITDA as on 30th June, however, was 1.29 as compared to 1.30 and the net debt to equity was 0.44 as compared to 0.42."
  • M&A Saifco Acquisition · Closed

    Improve performance in J&K region, potential for 2-2.5 million tons expansion in the region.

    Management: "The company also completed the acquisition of Saifco on 6th June. So, now Saifco becomes a subsidiary of the company and the management of Saifco has been taken over and now the company is working on improving the performance of Saifco in the J&K region."
  • Liquidity Cash ₹2,407 Cr
    Management: "The cash was Rs. 2,407 crores as compared to Rs. 2,536 crores."

Guidance & targets

Volume

  • Total Volume Volume · FY26 · High confidence 20 million tons
    Management: "So, we have given a guidance of about 20 million in this financial year."

    — Management

  • Bihar Volume Volume · FY26 · Medium confidence close to a million ton
    Management: "And hopefully, end of this fiscal itself we should be doing about close to a million ton maybe in Bihar."

    — Management

Capacity

  • Consolidated Grey Cement Capacity Capacity · FY26 · High confidence 32 million tons
    Management: "Yes, so we are already 25.26 million tons and 6 million tons is added, we will be 31.26. We have certain opportunities in the South which we are working out and that materializes, it will be 32 million tons by FY26."

    — Management

Capex

  • Total Capex Capex · FY26 · High confidence 2000 crores
    Management: "So, in this year, it will be close to 2000 crores and next year, presently we have these plans for the normal CAPEX and the putty expansion, what we have announced. So, for all that, it should be close to 600 crores as of now."

    — Management

  • Total Capex Capex · FY27 · High confidence 600 crores

    — Management

Cost

  • Cost Saving Cost · FY26 · High confidence 40 to 50 per ton
    Management: "Yes, that remains intact. We will, during this fiscal, get about Rs. 40 to 50 in terms of cost saving."

    — Management

Green Energy

  • Green Power Share Green Energy · FY26 · High confidence 60%
    Management: "Yes. So, on the green power also, which is again as a part of cost saving when we say. So, we should be closer to 60% by the end of this fiscal."

    — Management

Revenue

  • Paint Business Revenue Revenue · FY26 · High confidence 400-450 crores
    Management: "Great. Second on the paint or whatever we have said in terms of the revenue target for 400-450 odd crores in '26 and 600 crores in '27 and breakeven by FY27, that remains intact?" Management: "Yes, that remains intact."

    — Management

  • Paint Business Revenue Revenue · FY27 · High confidence 600 crores

    — Management

Profitability

  • Paint Business Breakeven Profitability · FY27 · High confidence Breakeven
    Management: "Great. Second on the paint or whatever we have said in terms of the revenue target for 400-450 odd crores in '26 and 600 crores in '27 and breakeven by FY27, that remains intact?" Management: "Yes, that remains intact."

    — Management

  • Putty Expansion IRR Profitability · High confidence over 15%
    Management: "So, IRR will be over 15%."

    — Management

Incentives

  • Incentives Expected Incentives · next 3 to 5 years · High confidence 300 crores
    Prateek Kumar: "Good afternoon, sir and congratulations. My first question is on clarification on incentives. So, based on the current index, around 300 crores kind of incentive is expected for next 3 to 5 years based on your expansion." Management: "Yes. This is what we feel."

    — Management

EBITDA

  • Fujairah (UAE) Plant EBITDA EBITDA · FY26 · High confidence 80-90 crores
    Management: "Yes, we have already reached in fact, with this quarter. The Fujairah working, I think for the year as a whole should be around 80 crores or so, 80 to 90 crores."

    — Management

Volume Growth

  • Putty Segment Growth Volume Growth · High confidence 7% to 10%
    Management: "And we are envisaging a growth in the putty segment of between 7% to 10%. So, with that growth, keeping that growth in mind we would need additional capacity."

    — Management

What to watch in Q2 FY26

Q2 FY26 Operating Expenses

next quarter
Current Low in Q1 due to seasonality
Target Increase sequentially due to marketing spends and kiln maintenance

Why it matters

To assess the impact of planned marketing activities and maintenance on profitability.

Management: "So, actually, it will be higher going forward because all our major marketing spends, we have these dealer tours and all. So, normally we plan the tours, everything in the second quarter, which is the lean period. So, the marketing, the other expenses will increase sequentially."

Risks & concerns

  • Sequential decline in sales and EBITDA

    medium

    Net sales de-grew by 6% QoQ and EBITDA dipped 9% QoQ, impacting margins sequentially.

    Management acknowledged

  • Sequential decline in white cement margins

    medium

    White cement margins declined sequentially, but management states they have now stagnated in the 15-20% range.

    Management acknowledged

  • Increased operating costs in Q2 FY26

    medium

    Q2 is expected to be a tough quarter due to higher marketing spends (dealer tours) and scheduled kiln maintenance.

    Management acknowledged

  • Rising power, fuel, and freight costs

    medium

    Power and fuel costs increased due to higher pet coke prices and balanced clinker production; freight costs increased by ₹5-6 per ton due to longer lead distances for Bihar markets.

    Management acknowledged

  • Monsoon impact on pricing

    medium

    Management is waiting to observe the impact of monsoon on pricing, particularly for non-trade segments, indicating potential volatility.

    Management acknowledged

  • De-growth in North region

    low

    Some de-growth in the North due to prevailing market conditions, though offset by growth in Central and South.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Panna clinker capacity clarification Direct
Management: "No. It was always at 12,000 TPD... this has always been a 4 million tons.

Clarifies the actual clinker capacity at Panna, correcting analyst's understanding from previous reports.

Asked by Amit Murarka

Incentives booked and plant eligibility Direct
Management: "Incentive for the quarter was 85 crores... we are getting one incentive in the North, which is for Nimbahera Line 3 and that would only be available in this fiscal. So, that will get concluded. Otherwise, we are entitled for subsidy for the three grinding locations, Aligarh, Hamirpur and Prayagraj.

Provides specific financial data on incentives and details which plants are currently receiving them, impacting profitability.

Asked by Amit Murarka

Other expenses and marketing spends outlook Direct
Management: "So, actually, it will be higher going forward because all our major marketing spends, we have these dealer tours and all. So, normally we plan the tours, everything in the second quarter, which is the lean period. So, the marketing, the other expenses will increase sequentially.

Signals higher operating expenses in the upcoming quarter, which could impact sequential profitability.

Asked by Amit Murarka

Regional volume breakup Evasive
Management: "No, so regional broadly, we are not sharing the regional numbers.

Management's reluctance to provide regional volume data limits investor insight into market share dynamics and regional demand trends.

Asked by Devesh Agarwal

Next leg of expansion post-Panna Partial
Management: "Yes, we are working out, we are close to finalizing and we shall be putting up our options to the board very soon. And I think very shortly, once the board approves could be guided towards, because we have done in central, so more towards the North...

Indicates upcoming strategic decisions on future capacity expansion locations, crucial for long-term growth trajectory.

Asked by Devesh Agarwal

White cement margins and putty expansion rationale Direct
Management: "So, as far as margins, yes, the white cement, we have seen the margins declining sequentially. But I think now as we see, it has stagnated. There is no further major dip in the white cement margins. It's ranging between 15% to 20%...

Addresses concerns about white cement profitability and explains the strategic necessity of putty expansion to maintain market share and meet peak demand despite margin pressures.

Asked by Navin Sahadev

Pace of future expansions Direct
Management: "Yes, you are right. The company is thinking, earlier we were actually taking projects after completion... Now with our capacity reaching 30 million tons and the cash flow supporting for the investment and with a view that we get to 50 million tons by 2030, I think we could be in a way adding up a project, announcing a project every year.

Reveals a shift in capital allocation strategy towards more continuous and potentially simultaneous project execution to achieve the 50 MT target by 2030.

Asked by Navin Sahadev

North/Central vs South pricing dichotomy Partial
Management: "So, I think, we have to wait, we have to see what really happens in the monsoon. The monsoons are now, as I said that there has been some pressure on non-trade pricing. Marginal pressure on trade pricing, but not significant enough, but we still have to wait and watch.

Highlights regional pricing disparities and attributes them to monsoon seasonality and non-trade pricing pressures, indicating uncertainty for the near future.

Asked by Ritesh Shah

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

J K Cements reported a strong Q1 FY26 with net sales growing 19% year-on-year to ₹3,028 crores, although experiencing a 6% sequential de-growth. EBITDA increased by 41% year-on-year to ₹674 crores, but dipped 9% quarter-on-quarter. The EBITDA margin stood at 22.3% for the quarter, an improvement from 18.7% year-on-year but a slight decline from 22.8% in the previous quarter. Per ton EBITDA was ₹1,247, up from ₹1,014 year-on-year.

Capacity Expansion and Project Updates

The company completed de-bottlenecking at its Ujjain unit, increasing consolidated grey cement capacity to 25.26 million tons. The 6 million tons greenfield and brownfield expansion projects, including an integrated unit at Panna (4 million tons clinkerization) and grinding locations at Panna, Hamirpur, Prayagraj, and Buxar, are on track for completion by the end of the calendar year. Additionally, the board approved a 6 lakh tons putty expansion in Rajasthan with a capital outlay of ₹195 crores to meet growing demand.

Cost and Margin Dynamics

Power and fuel costs increased during the quarter, primarily due to higher pet coke prices and a balanced clinker production strategy. Freight costs also saw a marginal increase of ₹5-6 per ton due to extended lead distances for new markets like Bihar. White cement margins, after a sequential decline, have now stagnated in the 15-20% range. Management expects Q2 to be challenging with higher marketing spends and scheduled kiln maintenance impacting expenses.

Regional Market Dynamics

Grey cement volume growth of 15% year-on-year was significantly driven by Central India, which saw over 50% growth, and the South region, albeit from a lower base. The North region experienced some de-growth due to market conditions. Management noted that cement realizations were flat on average, with increases in the South compensating for marginal pressure in North and Central regions. The company is actively expanding its dealer network in Central India and entering new markets like Bihar to support upcoming capacities.

Capital Allocation and Debt Profile

Gross debt as of June 30, 2025, stood at ₹5,203 crores, with net debt at ₹2,796 crores. The net debt to EBITDA ratio was 1.29, slightly lower than 1.30 in the previous quarter, and management aims to keep it below 2. Capex for FY26 is projected to be around ₹2,000 crores, with FY27 capex for normal and putty expansion estimated at ₹600 crores. The company is considering a more continuous approach to project execution, potentially undertaking two projects simultaneously to achieve its 50 million tons capacity target by 2030.

Incentives and Green Power Initiatives

The company booked ₹85 crores in incentives for the quarter, primarily from Nimbahera Line 3 (expiring this fiscal) and three grinding locations (Aligarh, Hamirpur, Prayagraj). Total incentives of approximately ₹300 crores are expected over the next 3-5 years. The green power capacity is currently 184 megawatts, and the company aims to increase its green power share to closer to 60% by the end of FY26, contributing to cost savings of ₹40-50 per ton for the fiscal year.

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