J K Cements

J K Cements reported a strong Q1 FY26 with net sales growing 19% year-on-year to ₹3,028 crores, though it de-grew 6% quarter-on-quarter. EBITDA saw a significant 41% year-on-year increase to ₹674 crores, but a 9% dip sequentially. The EBITDA margin stood at 22.3% for the quarter, an improvement from 18.7% in the previous year. Per ton EBITDA was ₹1,247, compared to ₹1,014 last year and ₹1,265 in the previous quarter.

Grey cement volume grew by 15% year-on-year, primarily driven by exceptional growth in Central India, which saw an increase of over 50%. The South region also contributed to growth from a low base. White cement volumes grew by 8% year-on-year. While Central and South regions performed well, there was some de-growth in the North due to prevailing market conditions. The company is actively expanding its market share across UP, MP, and entering the eastern region, including Bihar.

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 are on track, including the integrated unit at Panna (4 million tons clinkerization unit) and grinding locations at Panna, Hamirpur, and Prayagraj. The greenfield site at Buxar in Bihar is also progressing, with most expansions expected to be completed by the end of the calendar year. The board also approved a 6 lakh tons putty expansion in Rajasthan with a capital outlay of ₹195 crores.

J K Cements completed the acquisition of Saifco on June 6th, making it a subsidiary. Management is now focused on improving Saifco's performance in the J&K region, with an immediate opportunity to upgrade the kiln by 300-400 TPD. For Toshali, the company is still working on securing a long-term raw material tie-up, which could unlock a potential expansion of 2.5 to 3 million tons. The company aims to reach 50 million tons capacity by 2030 and plans to continuously add projects, potentially having two projects ongoing simultaneously.

As of June 30, 2025, gross debt stood at ₹5,203 crores, up from ₹5,101 crores on March 31. Cash reserves were ₹2,407 crores, leading to a net debt of ₹2,796 crores. The net debt to EBITDA ratio improved slightly to 1.29 from 1.30, and net debt to equity was 0.44. The company spent ₹350-400 crores on CAPEX this quarter and projects a full-year FY26 CAPEX of approximately ₹2,000 crores, with FY27 CAPEX estimated at ₹600 crores for normal and putty expansion.

The company expects to achieve cost savings of ₹40-50 per ton for FY26. Power and fuel costs increased due to higher pet coke prices and balanced clinker production. Freight costs also rose slightly due to increased lead distances from seeding Bihar markets. While there was marginal pressure on pricing in North and Central regions, South India saw price increases, leading to overall flat average prices. Management anticipates a tough Q2 due to higher marketing spends, dealer tours, and scheduled kiln maintenance.