J K Cements — Q3 FY26 earnings call

Call held 20 Jan 2026

Management summary

J.K. Cement reported strong top-line and volume growth in Q3 FY26, driven by robust demand in both grey and white cement segments. However, profitability was impacted by an exceptional charge related to a new Labour Code liability and a decline in EBITDA per tonne. The company continues its aggressive capacity expansion, with several projects recently commissioned or nearing completion, and has outlined significant capex plans for the coming years.

Highlights

  • Consolidated Net Sales grew 20% YoY to INR 3,383 crores in Q3 FY26.

  • Consolidated EBITDA increased 13.41% YoY to INR 558 crores.

  • Grey cement volumes grew 23% YoY and white business volumes rose 13% YoY.

  • Brownfield 6 million tonne expansion in Central India, including 3.3 MT clinkerization and 3 MT grinding capacity, has been commissioned.

Concerns

  • Consolidated Profit Before Tax (PBT) declined 3.94% YoY to INR 268 crores, impacted by a new Labour Code liability of INR 47.8 crores.

  • Standalone EBITDA per tonne decreased 9.2% YoY to INR 928/tonne.

  • Non-trade pricing faced pressure in Q3 FY26, though management noted recovery in January.

Key financials

  1. Consolidated Net Sales ₹3,383 Cr +20%YoY
  2. Consolidated EBITDA ₹558 Cr +13.4%YoY
  3. Consolidated PBT ₹268 Cr -3.9%YoY
  4. Standalone EBITDA Margin 17.1%
  5. Standalone EBITDA per tonne ₹928/tonne -9.2%YoY
  6. Standalone EPS ₹23.3 -9.7%YoY
  7. Clinker Production 3.6 million tonnes
  8. Paint Turnover ₹103 Cr

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.

Capital allocation

high confidence
  • Capex ₹2,500 Cr
    • Jaisalmer Greenfield expansion ₹600 Cr
    • Nathdwara wall putty plant ₹50 Cr
    • Brownfield 6 MT expansion in Central India (clinkerization 3.3 MT, grinding 3 MT)
    • Buxar Greenfield grinding unit
    • 7 million tonne expansion (part of FY27 capex) ₹3,000 Cr
    So, CAPEX number in this year should be INR 2,500 crores to INR 2,800 crores and out of that Jaisalmer would be INR 600 crores. Actually, as you see, whatever number we had given without Jaisalmer, which was around INR 2,000 for FY 2026, that remains as it is. The incremental CAPEX in this year will be on Jaisalmer, which is around INR 600 crores and another INR 50 crores - INR 60 crores on the Nathdwara wall putty plant. Otherwise, we are broadly, in line whatever earlier plan which we had given of the CAPEX. And next year CAPEX would be around INR 3,500 crores, which would include around INR 3,000 crores of the CAPEX on the 7 billion tonne expansion.
  • Debt 1.4× EBITDA
    average debt profile and net debt-to-EBITDA, as of 31st December, we are at 1.41. And I think by March, it could be around 1.6 or something. And next year, also, FY 2027, it should be closer to 2 or reach 2, I think.

Guidance & targets

Volume

  • Volume Growth Volume · FY27-FY28 · High confidence Double-digits (12-15%)
    So, see, again, we expect the growth to be in double-digits. Mid-teens may not be possible, but definitely like in 2026, we end up at 20 million. And we are seeing maybe early teens maybe closer to 23 million tonnes, 22.5 million tonnes to 23 million tonnes, and 25.5 as we go up and it should be anything ranging between 12% to 15% growth.

    — Management

  • Total Volume Volume · FY26 · High confidence 20 million tonnes
    So, we are not changing any guidance on the volume numbers for FY 2026.

    — Management

Commissioning

  • Panna Line 2 Remaining Work Completion Commissioning · by end of February 2026 · High confidence Completed
    With this, we are confident that all the remaining work of the project at Panna like OLBC, etc. would also get commissioned within February. And by end of February, the entire work would be completed.

    — Management

  • Jaisalmer Greenfield Commissioning Commissioning · by September 2027 · High confidence Commissioned
    We have undertaken a Greenfield expansion at Jaisalmer, so here the work has already started in full swing at the integrated site... and we are hopeful that by September 2027, this should get commissioned.

    — Management

  • Punjab & Rajasthan Grinding Units Commissioning Commissioning · by September 2027 · High confidence Commissioned
    We are soon going to start work at both the grinding locations in Punjab and Rajasthan, so that also we are confident that by September 2027 we should be able to commission the same.

    — Management

  • Rajasthan Wall Putty Plant Commissioning Commissioning · by September 2026 · High confidence Commissioned (4 lakh tonnes additional)
    As regards, we have also taken up a Greenfield wall putty plant in Rajasthan and the work on the same has already been started and we expect that by September 2026 we should be able to commission these 4 lakhs tonnes additional wall putty plant.

    — Management

Incentives

  • Quarterly Incentive Run Rate Incentives · FY27 · Medium confidence INR 75 crores
    But our exit run rate of FY 2027 that could be INR 75 crores quarterly.

    — Management

Paint Business

  • Turnover Paint Business · FY26 · High confidence INR 380-390 crores
    So, on the paint, what we see that we should end the year at around closer to INR 385 crores - INR 390 crores, maybe INR 400 crores. I am not too confident in INR 400 crores, but definitely between INR 380 crores to INR 390 crores.

    — Management

  • Break-even Paint Business · FY27 · Medium confidence Break-even
    And next year, what we see when we cross the INR 500 crore number with a higher gross margin, that FY 2027, we should see a break-even in the paint business.

    — Management

Costs

  • Labour Code Recurring Impact Costs · monthly · Medium confidence INR 3-4 crores
    Having said so, there could be some impact when we have no exact numbers, but not something substantial, maybe monthly INR 3 crores to INR 4 crores at the most. This is what we see.

    — Management

What to watch in Q4 FY26

Buxar Greenfield Grinding Unit Commissioning

within 30 days
Current Advanced stage of completion
Target Commissioned

Why it matters

Successful commissioning will add new grinding capacity and contribute to volume growth.

The Buxar Greenfield grinding is the advanced stage of completion, and we feel that within the next 30 days this should get commissioned.

Risks & concerns

  • New Labour Code Liability

    medium

    An exceptional item of INR 47.8 crores was recorded in Q3 FY26, with an estimated recurring monthly impact of INR 3-4 crores.

    Management acknowledged

  • Pricing Pressure in Non-Trade Segment

    medium

    Non-trade pricing was under pressure in Q3, although management noted a recovery in January.

    Management acknowledged

  • Fuel Cost Volatility

    medium

    Pet coke prices are still higher, and rupee devaluation impacts new shipments, potentially increasing costs.

    Management acknowledged

  • Competitive Pricing Pressure from New Capacity

    medium

    Analyst raised concerns about multiple players announcing capacity additions and potential pricing pressure, but management believes pricing discipline can sustain.

    Analyst downplayed

Q&A highlights

7 direct
Incentives booked for Q3 FY26 Direct
Q3 number of incentives is lower on account of the GST rate cut and the impact is around INR 25 crores. So, last quarter number was INR 86 crores and this quarter it is INR 60 crores.

Clarified the specific incentive amount for the quarter and the reason for its decline, which is a key input for financial modeling.

Asked by Amit Murarka

Decline in other expenses in Q3 FY26 Partial
So, there is some marketing spend is lower because it was taken up in September it was higher, especially in the white business. Also, we see that there is a dip in the branding cost. But in this quarter, I think it will be higher than Q3.

Explained the reason for the lower other expenses in Q3, attributing it to marketing spend, and indicated a potential increase in Q4, which is relevant for future cost projections.

Asked by Amit Murarka

Unlocking Panna Line 2 capacity potential Direct
See, it will take some time. One year I think. We do not need that extra flexibility immediately. I think we would be seeing once we run the capacity at optimal rate for about 6 months or so. So, maybe in the next fiscal it is end of next fiscal that we will see the possibility, how we accelerate it to higher capacity to about 4 million tonnes.

Provided a timeline for realizing the full 4 MT capacity potential of Panna Line 2, indicating it's a medium-term goal after initial stabilization.

Asked by Amit Murarka

Volume growth targets for FY27 and FY28 Direct
So, see, again, we expect the growth to be in double-digits. Mid-teens may not be possible, but definitely like in 2026, we end up at 20 million. And we are seeing maybe early teens maybe closer to 23 million tonnes, 22.5 million tonnes to 23 million tonnes, and 25.5 as we go up and it should be anything ranging between 12% to 15% growth.

Gave specific volume targets and growth rates for the next two fiscal years, which is crucial for long-term revenue forecasting.

Asked by Kunal Shah

CAPEX and Net Debt outlook for FY27/28 Direct
And next year, also, FY 2027, it should be closer to 2 or reach 2, I think. And we would get incremental volumes. Yes, because of Greenfield CAPEX is higher. We are not concerned, but we will not delay, we will definitely keep a watch on the balance sheet.

Addressed concerns about rising debt-to-EBITDA ratio due to aggressive Greenfield CAPEX, providing management's perspective on balancing growth with financial prudence.

Asked by Kunal Shah

Non-trade pricing recovery and impact on trade prices Direct
But now, since the non-trade, with the improved demand, the non-trade prices have improved. This should definitely be the platform for a possible increase in the trade prices.

Confirmed recovery in non-trade prices in January and highlighted its potential positive impact on trade prices, indicating improving market dynamics.

Asked by Kunal Shah

Fuel mix and cost reduction strategy Direct
No, Navin, actually it is because of the mix, because Indian fuel consumption has increased. Central plant is actually basically more on, closer to the mines, it is more on Indian coal, which is cheaper. The pet coke is mainly used in the northern plants and in south plants, but in the central plants, it is a reverse situation where we are using the pet coke only as a blending fuel, about 20% and the AFR is also higher.

Provided detailed insight into the company's fuel mix strategy, explaining how increased use of cheaper Indian coal and AFR in Central plants helps reduce overall fuel costs.

Asked by Navin Sahadeo

Exceptional item for new Labour Code and recurring impact Direct
See, as an exception item, this is under the new Labour Code, which has been effective from 21st of November. So, on the new Labour Code where they have spelt out the new wage and the definition of how the gratuity and the leave and encashment has to be calculated... Having said so, there could be some impact when we have no exact numbers, but not something substantial, maybe monthly INR 3 crores to INR 4 crores at the most. This is what we see.

Clarified the nature of the INR 46 crores exceptional item and provided an estimate for the ongoing monthly financial impact, which is crucial for assessing future profitability.

Asked by Ritesh Shah

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

J.K. Cement reported a strong Q3 FY26 with consolidated net sales growing 20% year-on-year to INR 3,383 crores, and a 15.06% sequential increase. Consolidated EBITDA rose 13.41% YoY to INR 558 crores. Volume growth was robust, with grey cement volumes up 23% YoY and white business volumes increasing 13% YoY. However, consolidated Profit Before Tax (PBT) saw a slight decline of 3.94% YoY to INR 268 crores, primarily due to an exceptional item.

Impact of New Labour Code Liability

The company recorded an exceptional item of INR 47.8 crores in Q3 FY26, attributed to the new Labour Code liability. Management clarified that this is a one-time adjustment. Looking ahead, they estimate a recurring monthly impact of INR 3-4 crores from this new code, which will be factored into future operating costs and could affect profitability.

Capacity Expansion and Commissioning Updates

J.K. Cement is actively progressing on its capacity expansion plans. The Brownfield 6 million tonne expansion in Central India has seen the commissioning of a 3.3 MT clinkerization unit and 3 MT grinding capacity across Panna, Hamirpur, and Prayagraj. The Buxar Greenfield grinding unit is in an advanced stage and is expected to be commissioned within the next 30 days. All remaining work for Panna Line 2 is slated for completion by the end of February 2026.

Future Growth and Capex Outlook

The company maintains its FY26 volume guidance of 20 million tonnes. For FY27 and FY28, it targets double-digit volume growth, aiming for 22.5-23 million tonnes and 25.5 million tonnes respectively, representing 12-15% growth. Total CAPEX for FY26 is projected at INR 2,500-2,800 crores, including INR 600 crores for Jaisalmer and INR 50-60 crores for the Nathdwara wall putty plant. FY27 CAPEX is estimated at INR 3,500 crores, with INR 3,000 crores allocated for a 7 million tonne expansion, and FY28 will see INR 1,000-1,200 crores in spillover CAPEX.

Pricing and Cost Dynamics

Non-trade pricing experienced pressure during Q3 FY26, but management observed a recovery in January, which is expected to provide a platform for potential increases in trade prices. On the cost front, the company has benefited from an increased consumption of cheaper Indian coal and Alternate Fuel and Raw materials (AFR) in its Central plants, using pet coke primarily as a blending fuel. Despite this, standalone EBITDA per tonne saw a 9.2% YoY decline to INR 928/tonne.

Paint Business Performance and Outlook

The paint business recorded a turnover of INR 103 crores in Q3 FY26, contributing to a nine-month turnover of INR 285 crores. Management projects the FY26 turnover for the paint business to be around INR 380-390 crores. The company aims for the paint business to achieve break-even by FY27, contingent on crossing the INR 500 crore turnover mark with improved gross margins.

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