Skip to content

    JK Lakshmi Cem.

    JKLAKSHMI
    Construction Materials·7 Nov 2025
    Management Summary

    JK Lakshmi Cement reported a Q2 FY26 with improved sales mix, higher premium product proportion, and better volume growth than the industry. Non-cement revenue increased to Rs. 153 crores, though with a low 4% EBITDA margin. The company is progressing on its Durg expansion with major equipment orders placed, while also facing challenges from increased power, fuel, and freight costs, and a decline in green power contribution. Receivables have also seen a significant increase.

    Highlights

    6
    • Non-cement revenue grew to Rs. 153 crores, up from Rs. 144 crores in the previous quarter.

    • Sales proportion in the North region improved to 69%.

    • Premium product proportion increased by 3% to 26% of real volume.

    • Commissioning of Surat grinding station led to increased volume in Gujarat, a better realization market.

    • Orders for all major long delivery items for the Durg Brownfield expansion have been placed.

    • Management expects volume growth to be higher than the industry average in the coming quarters.

    Concerns

    5
    • EBITDA margin for non-cement revenue was low at 4%.

    • Green power proportion decreased to 46% from 53% due to plant shutdowns and weather conditions.

    • Power and fuel costs, as well as freight costs, saw an increase QoQ, with freight costs jumping 8-8.5% per ton.

    • Receivables have nearly doubled from March to the current period.

    • Approval for the overland conveyor belt project is still pending with the Ministry of Steel.

    What Changed2

    vs Q3 FY26

    Guidance items11 → 15 (+4)Risks discussed4 → 7 (+3)

    Key financials

    Single quarter

    10 metrics
    1. 01Non-cement Revenue₹153 Cr
    2. 02Non-cement EBITDA Margin4%
    3. 03RMC Revenue₹72 Cr
    4. 04AC Revenue₹52 Cr
    5. 05Premium Product Proportion26%

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹50 crores this quarter · ₹1,000 crores (FY26) planned

    Debt

    Debt disclosed

    Guidance & targets

    15
    CategoryTargetPriority
    Capacity
    Total Capacity
    30 million tons
    High
    Capacity
    Durg Brownfield Expansion Capacity
    22.6 million tons
    High
    Capacity
    Greenfield Plants Capacity (Nagaur, Kutch)
    3 million tons each
    High
    Capacity
    Durg Grinding Unit Commissioning
    March 2027
    High
    Capacity
    Durg Grinding Unit (one of two) Commissioning
    March 2027
    High
    Capacity
    Durg Grinding Units (total)
    2.2 million tons
    High
    Capacity
    Nagaur and Kutch Clinker Capacity
    2 million tons
    High
    Capacity
    Nagaur and Kutch Cement Capacity
    3 million tons
    High
    Capex
    Durg Brownfield Expansion Cost
    Rs. 3,000 crores
    High
    Capex
    FY26 Capex
    Rs. 1,000 to Rs. 1,200 crores
    High
    Capex
    Annual Capex (FY27-FY28)
    Rs. 1,300 to Rs. 1,500 crores per annum
    High
    Capex
    Greenfield Capex per ton
    $100 per ton
    High
    Cost Savings
    Cost Savings
    at least Rs. 120
    High
    Volume Growth
    Volume Growth vs. Industry
    higher than industry
    Medium
    Debt
    Net Debt-to-EBITDA
    not crossing three times
    High

    Durg Brownfield Expansion Progress

    next quarter
    CurrentMajor long delivery items ordered, Rs. 50 crores spent till Sep 2025
    TargetFurther progress on construction and capex spend

    Why it matters

    Key capacity expansion project, tracking execution and capex deployment is crucial for future growth.

    Yes, you are right. You had asked this question earlier also and we had confirmed that we will confirm to you in the next quarter. We are happy to inform that the orders for all the major long delivery items have been placed. ... Yes, we are talking of that only, Rs. 50-odd crores only has been spent. Rest will come in the remaining part of the current year and next two years.

    How to verify

    capital_allocation.capex.current_quarter_spend

    Risks & concerns

    7
    RiskSeverity

    Low EBITDA margin for non-cement business

    Non-cement revenue had an EBITDA margin of only 4%.Analyst acknowledged

    medium

    Decline in green power proportion

    Green power proportion dropped to 46% from 53% due to plant shutdowns and weather, impacting power and fuel costs.Management acknowledged

    medium

    Increase in power and fuel costs

    Power and fuel costs saw an inch up QoQ, partly due to lower green power contribution and higher Petcoke prices ($116-$120/ton).Management acknowledged

    medium

    Increase in freight costs

    Freight costs per ton jumped by 8-8.5% QoQ.Management acknowledged

    medium

    Doubling of receivables

    Receivables have nearly doubled from March to the current period, though management stated it's normal.Analyst acknowledged

    medium

    Delay in overland conveyor belt approval

    Approval for the right of way for the overhead conveyor belt is pending with the Ministry of Steel, causing project delays.Management acknowledged

    medium

    Industry EBITDA/ton below Rs. 1,000

    The entire industry's EBITDA/ton is currently less than Rs. 1,000, making it challenging to achieve higher profitability targets.Management acknowledged

    medium

    Q&A highlights

    7

    “Yes, you are right. You had asked this question earlier also and we had confirmed that we will confirm to you in the next quarter. We are happy to inform that the orders for all the major long delivery items have been placed.”

    Confirms significant progress on a key brownfield expansion project, indicating execution is on track.

    asked by Amit Murarka

    2 min read6 chapters

    Detailed Narrative

    01

    Capacity Expansion and Long-Term Growth Strategy

    JK Lakshmi Cement is targeting a total capacity of 30 million tons by FY30. This includes the Durg Brownfield expansion, which will increase capacity to 22.6 million tons by FY28 at a cost of Rs. 3,000 crores. Major long delivery items for Durg have been ordered, with Rs. 50 crores already spent. Additionally, three greenfield plants in Nagaur, Kutch, and Assam are planned for FY29-FY30, with Nagaur and Kutch each adding 3 million tons of cement capacity (2 million tons clinker). The company anticipates a greenfield capex of around $100 per ton by 2030.

    02

    Operational Efficiency and Cost Management Initiatives

    The company is actively working on various levers to improve performance, including enhancing premium product proportion, reducing distribution costs, and improving plant efficiency. Management reiterated its target of achieving at least Rs. 120 in cost savings within 18-24 months and confirmed being on track. The premium product proportion has already increased from 23% to 26% QoQ, driven by new brands like Green Plus. The company is also exploring technology, AI, and digital algorithms for process optimization.

    03

    Sales Mix and Realization Dynamics

    In Q2 FY26, the company saw an improved blended realization partly due to a shift in geographical mix, with North sales (including Gujarat) increasing to 69% of total sales. The premium product proportion also rose to 26%. The commissioning of the Surat grinding station contributed to higher volumes in Gujarat, a market with better realization. While trade prices remained largely intact, non-trade prices saw a decline, which management attributes to passing on benefits to customers and expects to normalize with improved demand.

    04

    Green Power and Fuel Cost Trends

    The green power proportion decreased to 46% in Q2 FY26, down from 53% in the previous quarter. This decline was primarily due to plant shutdowns and adverse weather conditions affecting WHRS production and solar generation, leading to an increase in power and fuel costs. Petcoke prices were noted to be in the range of $116-$120 per ton. Management expects green power contribution to improve in the current quarter with better WHRS generation and solar availability.

    05

    Overland Conveyor Belt Project Update

    The critical overland conveyor belt project, aimed at improving logistics efficiency, is facing delays. While the sale board has approved the leasing of land and right of way, final approval is pending with the Ministry of Steel. Management is actively pursuing this approval but acknowledges the difficulty in providing a definitive timeline due to external dependencies.

    06

    Financial Outlays and Leverage

    The total capex for FY26 is projected to be between Rs. 1,000 and Rs. 1,200 crores, with Rs. 50 crores already spent on the Durg expansion till September. For the subsequent two years (FY27-FY28), annual capex is estimated at Rs. 1,300 to Rs. 1,500 crores. The company aims to maintain its net debt-to-EBITDA ratio below three times, even with aggressive expansion plans. Receivables have nearly doubled from March, which management considers a normal fluctuation.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.