JK Lakshmi Cement Limited — Q4 FY25 earnings call

Call held 28 May 2025

Management summary

JK Lakshmi Cement reported improved demand and realization in Q4 FY25, with sequential realization up 7%. The company outlined ambitious CAPEX plans of ₹1,300 crores for FY26, targeting 10% volume growth and a cost reduction of ₹100-120 per tonne. However, the Northeast project faces significant delays, and the Durg clinker unit commissioning is now expected in Q3 FY27.

Highlights

  • Demand improved in Q4 FY25, expected to grow 6.5-7% in FY26

  • Brand rejuvenation exercise completed, Green Plus product well-received

  • Premium product (Pro Plus) performing well, focus on increasing premium cement proportion (25% in Q4)

  • Trade percentage improved to 60% in Q4 FY25

  • Internal efficiency improvements in renewable energy, thermal substitution, supply chain, and logistics

  • Sequential realization increased by 7% in Q4 FY25 due to demand improvement and better pricing

  • FY26 CAPEX planned at ₹1,300 crores for JK Lakshmi Cement, including Durg expansion and Northeast project

  • Net debt at ₹1,150 crores (consolidated)

  • Non-current fixed deposits with banks increased to ₹408.9 crores (primarily ₹300 crores) from ₹60 crores

Concerns

  • Northeast project (Agrani Cement) delayed by 7-8 months due to local/political issues and land acquisition hurdles

  • Durg clinker unit commissioning timeline pushed to Q3 FY27 (from earlier FY27 end)

  • Conveyor belt project awaiting final ministry approval, expected operational by March '26

  • Pet coke prices remain volatile, posing a cost risk

Key financials

  1. Non-Cement Revenue ₹151 Cr
  2. RMC Revenue ₹75 Cr
  3. Non-Cement EBITDA Margin 3%
  4. Fuel Cost per Kilo Cal ₹1.53
  5. Blended Cement Share 65%
  6. Green Power Consumption 50%
  7. Premium Cement Proportion 25%
  8. Clinker-to-Cement Ratio 1.44
  9. EBITDA per Tonne (Implied) ₹976

What they filed

Q1 FY27: revenue up 9.4%, net profit down 28.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,234 1,497 1,898 1,741 1,532 +24%1,588 +6%1,902 +0%1,905 +9%
EBITDA81 199 351 311 208 +157%205 +3%275 −22%259 −17%
Net profit-31 75 175 150 81 +361%57 −24%125 −29%108 −28%
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 ₹1,300 Cr New plan — FY26 plan includes Durg expansion, Northeast project, and Udaipur payment
    • FY25 Actual CAPEX (JK Lakshmi) ₹300 Cr
    • FY25 Actual CAPEX (UCLL) ₹250 Cr
    • FY25 Actual CAPEX (Northeast) ₹50 Cr
    • FY26 CAPEX (JK Lakshmi, including Durg expansion) ₹1,100 Cr
    • FY26 CAPEX (Northeast project) ₹150 Cr
    • FY26 CAPEX (Udaipur payment) ₹50 Cr
    • FY27 CAPEX (JK Lakshmi) ₹1,000 Cr
    • FY27 CAPEX (Northeast) ₹800 Cr
    • Conveyor belt additional CAPEX ₹80 Cr
    As far as next year is concerned, we are expecting a CAPEX of about Rs. 1,100 crores in JK Lakshmi, including for the Durg expansion and Rs. 150 crores for the Northeast project and maybe some small Rs. 40 crores, Rs. 50 crores of payment left for the Udaipur. So maybe to all taken together, including the subsidy, about Rs. 1,300 crores. We expect Rs. 1,000 for JK Lakshmi, and Rs. 800 crores for the Northeast. That's all, Rs. 1,800 crores would be there. It will require a CAPEX of about Rs. 70 crores, Rs. 80 crores additional from whatever has already been incurred, which is included in the figure which I have mentioned to you.
  • Debt Net ₹1,150 Cr
    So total cash and cash equivalents as on March is how much and the net debt is how much? Yes, that I will tell you. Rs. 1,150 crores.
  • M&A Agrani Cement (Northeast Project) Acquisition · Pending regulatory · Consideration ₹[object Object] (mixed)

    Expansion into Northeast market with 1 million tons clinker and 1.5 million tons grinding capacity

    Rs. 130 crores paid so far out of Rs. 325 crores consideration, payment linked to achievement of milestones. Project delayed by 7-8 months due to local issues.

    Yes, two small clarifications. Sir for Northeast that Agrani Cement, we were supposed to pay Rs. 200 odd crores by March, so have we paid that? No, we have not paid that. We never said it is to be paid by March. We said it will be linked to certain achievement. So that has not been paid. Out of Rs. 325 crores consideration we have paid, initially to start with, Rs. 125 crores. Rs. 5 crores was additionally paid. So as of now we have paid Rs. 130 crores. And nothing beyond that. And in response to some earlier question I had mentioned that there are certain issues in that project because of the style of working which we are not used to working in that zone or area. So there are issues, so it is slightly getting delayed.
  • Liquidity Cash ₹408.9 Cr Non-current financial assets, primarily fixed deposits with banks, increased from Rs. 60 crores to Rs. 408.9 crores, with about Rs. 300 crores in deposits for more than a year.
    Rs. 408. 9 crores, which is a part of others, so it is third number. Deposit with banks of about Rs. 300 crores. If it is more than one year deposit then it has to be in the non-current, but it is fixed deposit with banks that has gone up from Rs. 60 crores to Rs. 408 crores primarily consist of these bank fixed deposits for more than a year.

Guidance & targets

Volume

  • Industry Volume Growth Volume · this year · High confidence 6.5% to 7%
    And going forward also we see that this year the growth is going to be about 6.5% to 7%, though our plan is to grow higher than the industry growth this year.

    — MR. ARUN KUMAR SHUKLA

  • Company Volume Growth Volume · this year · High confidence higher than industry growth
    our plan is to grow higher than the industry growth this year.

    — MR. ARUN KUMAR SHUKLA

  • Company Volume Growth Volume · this year · High confidence at least 10%
    So volume guidance, as I said that the industry is at let's say about 6%, 6.5%, we are looking at 10% growth at least this year volume growth.

    — Management

Capacity

  • Durg Clinker Unit Commissioning Capacity · FY27 · Medium confidence Q3 FY27

    Previously FY27 end → Q3 FY27

    So in case of Durg, our timeline is FY '27. This is what the plan is. ... I would say Q3 around.

    — Management

  • Total Capacity Target Capacity · by 2030 · High confidence 30 million tons
    So, obviously, our target remains to reach 30 million tons by '30.

    — Management

Logistics

  • Conveyor Belt Operational Logistics · FY26 · Medium confidence March '26

    Previously Q4 → March '26

    By March of '26 it should be in place, hopefully, if everything falls in place the way we have been working on that.

    — Management

  • Lead Distance Reduction Logistics · Medium confidence 380 kilometers

    From 393 kilometers today

    We definitely will try to bring it back to about 380 kilometers level, so maybe 10 kilometers of reduction we see there as well.

    — Management

Cost

  • Cost Reduction Cost · next 12 to 18 months · High confidence Rs. 100 to Rs. 120
    As I said during last quarter also that in 12 to 18 months' time the plan is to reduce cost by about Rs. 100 to Rs. 120, okay.

    — Management

  • Fuel Cost (Q1/Q2) Cost · Q1, Q2 · Medium confidence around Q4 levels (1.53)
    I think Q1, Q2 I think is going to be around this only, not much increase in this.

    — Management

Efficiency

  • Renewable Energy Proportion Efficiency · by end of this year · High confidence 52% to 53%

    From 50% today

    we have already reached 50%. And by the end of this year I think we will reach somewhere around 52%, around 53% kind of the renewable energy proportion.

    — Management

  • Thermal Substitution Rate (TSR) Efficiency · next year (FY26) · High confidence 12% to 13%

    From 9% (FY25 average) today

    On an average we look at about 12% to 13%. So, average we are looking at 12% for this year, right? This is what we are looking at. And the current year, means the year which has gone by, it was at about 9%. So 9% to 12%, that is what, 3% TSR improvement. This is what we see as of today.

    — Management

M&A

  • UCL Amalgamation Completion M&A · 2025 · Medium confidence sooner than December

    Previously by December → sooner than December

    Yes, that hopefully should happen sooner than December. That is what as of now we are saying. We are in final stages of hearing for the NCLT. Once that is there, it should be maybe we will not have to wait till December, I can tell you, as of now. It should happen sooner than that.

    — Management

What to watch in Q1 FY26

Northeast Project Status

Next quarter
Current Delayed by 7-8 months, Rs. 130 cr paid out of Rs. 325 cr consideration, local/political issues ongoing.
Target Resolution of local/political issues, progress on environmental clearance, further payment towards consideration.

Why it matters

Critical for future capacity addition and market presence in the Northeast, and for the overall growth strategy.

Northeast project is not going as per the plan, that is slightly delayed one, so it is taking because that's a different style of working there. ... I would say that's slightly delayed maybe by about seven, eight months. ... there are some local issues, some political issues, so it is getting delayed to put it in simple words.

Risks & concerns

  • Northeast Project Delays

    high

    The Northeast project is delayed by 7-8 months due to local issues, political issues, and land acquisition hurdles, impacting the planned capacity addition.

    Management acknowledged

  • Conveyor Belt Final Approval Pending

    medium

    The conveyor belt project, crucial for logistics, is awaiting final approval from the ministry, potentially affecting its March '26 operational target.

    Management acknowledged

  • Pet Coke Price Volatility

    medium

    Pet coke prices have been quite volatile, posing a risk to input costs, though management attempts to procure at lower prices.

    Management acknowledged

Q&A highlights

7 direct
Expansion Status and Timelines for Durg and Grinding Units Partial
So in case of Durg, our timeline is FY '27. This is what the plan is. ... In terms of ordering of equipment and other things, we have already finalized the (Inaudible) 8:40.5, we have already floated the tender. But as far as the ordering of equipment goes, that has not yet been done.

Clarifies the revised timeline for the major Durg clinker expansion and indicates that equipment orders are still pending, suggesting potential further delays.

Asked by Amit Murarka

Non-Cement Revenue and Margin in Q4 FY25 Direct
The Rs. 151 crores non-cement revenue, right? ... RMC is Rs. 75 crores. ... 3%.

Provides specific financial details for the non-cement segment, including revenue and EBITDA margin, which helps in understanding diversification and profitability outside core cement.

Asked by Rajesh Ravi

Fuel Cost, Blended Cement Share, and Green Power Consumption in Q4 FY25 Direct
1.53, 1.52 is for JK Lakshmi, consolidated 1.53. ... 65. ... Green power is 50%.

Offers key operational cost and efficiency metrics for the quarter, crucial for assessing cost management and sustainability efforts.

Asked by Rajesh Ravi

Drivers of Sequential Realization and Freight Cost Increase Direct
So, as I said that because of demand improvement I think the price is also better in some geographies, so it is a little far from our plant because that was making sense to grow because the margin was better, right. That is one. But no, there is no significant change in our geo mix as such. ... Yes. So the lead was 393-kilometer last quarter. And as you know that we had an outsource grinding station in UP East Amethi, right. So we discontinued that, and we started supplying those markets from our existing plants. So that is why the lead has gone up because we are serving those markets.

Explains the reasons behind the 7% sequential realization increase and the higher freight costs, attributing it to strategic market reach and discontinuation of an outsourced grinding station.

Asked by Rajesh Ravi

CAPEX Plans for FY26 and FY27 Direct
As far as next year is concerned, we are expecting a CAPEX of about Rs. 1,100 crores in JK Lakshmi, including for the Durg expansion and Rs. 150 crores for the Northeast project and maybe some small Rs. 40 crores, Rs. 50 crores of payment left for the Udaipur. So maybe to all taken together, including the subsidy, about Rs. 1,300 crores. ... We expect Rs. 1,000 for JK Lakshmi, and Rs. 800 crores for the Northeast. That's all, Rs. 1,800 crores would be there.

Provides clear, quantified CAPEX guidance for the next two fiscal years, detailing allocations for major expansion projects.

Asked by Rajesh Ravi

Status and Timeline of the Conveyor Belt Project Direct
Conveyer belt is in last leg, we have been saying that for last two quarters, some final approval from the ministry is required. ... By March of '26 it should be in place, hopefully, if everything falls in place the way we have been working on that.

Updates on a key infrastructure project aimed at efficiency, indicating a pending regulatory approval and a revised operational timeline.

Asked by Rajesh Ravi

Delays and Issues with the Northeast Project (Agrani Cement) Direct
Northeast project is not going as per the plan, that is slightly delayed one, so it is taking because that's a different style of working there. ... I would say that's slightly delayed maybe by about seven, eight months. ... there are some local issues, some political issues, so it is getting delayed to put it in simple words.

Highlights significant operational and political challenges causing delays in a crucial new market entry project, impacting capacity expansion plans.

Asked by Pratik Kumar

Pricing Trend in Markets Since March Exit Direct
Prices are almost flattish. Demand is yes, better, but prices have not gone up. It's almost flat in all the geographies where we operate, like East, part of West and North, right. And what I see, I think prices are going to be range amount till about definitely June or July because monsoon sets in in this part of India North little later right, maybe till about June, July things are going to be better in terms of demand, and prices also will follow the same line is what I see.

Provides an outlook on pricing stability and demand expectations for the upcoming quarters, influenced by seasonality and post-election recovery.

Asked by Pratik Kumar

3 min read 6 chapters

Detailed narrative

Q4 FY25 Performance and Demand Outlook

JK Lakshmi Cement experienced improved demand in Q4 FY25, with sequential realization increasing by 7%. The company anticipates industry growth of 6.5-7% for the current year, with JK Lakshmi targeting a higher volume growth of at least 10%. Management noted that Q1 and Q2 FY25 were challenging, but demand and pricing improved in the latter part of Q3 onwards. Prices are expected to remain flattish until June/July before improving with demand.

Strategic Initiatives: Brand, Product Mix, and Efficiency

The company completed its brand rejuvenation exercise, with the new 'Green Plus' product receiving positive feedback. There is a continued focus on increasing the proportion of premium cement, which stood at 25% in Q4 FY25. Efforts to improve trade percentage yielded results, reaching 60% in Q4. Internally, the company is working on enhancing efficiencies through increased renewable energy usage (50% in Q4, targeting 52-53% by year-end), improved thermal substitution rates (FY25 average TSR 9%, targeting 12-13% for FY26), and optimizing logistics to reduce lead distance from 393 km to 380 km.

Capacity Expansion Plans and Timelines

JK Lakshmi Cement has significant expansion plans. The Surat expansion (1.35 million tons) is currently undergoing trials. The major Durg project, including a 2.3 mtpa clinker unit and four grinding units, is now expected to be commissioned by Q3 FY27, with equipment orders yet to be placed. Grinding stations in Prayagraj and Madhubani have acquired land, and public hearing processes are underway. The Northeast project, with an original plan of 1 million tons clinker and 1.5 million tons grinding capacity, is delayed by 7-8 months due to local and political issues.

Capital Expenditure and Funding

Actual CAPEX for FY25 totaled ₹600 crores (₹300 crores for JK Lakshmi, ₹250 crores for UCLL, and ₹50 crores for Northeast). For FY26, the company plans a CAPEX of approximately ₹1,300 crores, including ₹1,100 crores for JK Lakshmi (Durg expansion) and ₹150 crores for the Northeast project. FY27 CAPEX is projected at ₹1,800 crores (₹1,000 crores for JK Lakshmi and ₹800 crores for Northeast). The consolidated net debt stands at ₹1,150 crores, supported by non-current fixed deposits with banks totaling ₹408.9 crores.

Northeast Project Challenges and Payment Status

The acquisition of Agrani Cement for the Northeast project, with a total consideration of ₹325 crores, has seen ₹130 crores paid so far. The remaining payment is linked to project achievements. However, the project is facing significant delays of 7-8 months due to local and political issues, as well as land acquisition and environmental clearance hurdles. Management stated they are taking a firm stance against local pressures.

UCL Amalgamation and Long-Term Capacity Target

The amalgamation of Udaipur Cement Works Limited (UCL) is in its final stages of NCLT hearing and is expected to be completed sooner than December 2025. This amalgamation involves the issuance of shares that will contribute to the overall capacity. JK Lakshmi Cement maintains its long-term target of reaching 30 million tons of capacity by 2030, with or without the Northeast project, by leveraging existing greenfield opportunities in Nagor and Kutch.

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