Summary
JK Cement Limited - Q3 FY 2026 Earnings Call Summary Monday, January 19, 2026, 4:00 PM IST
Event Participants
Executives Ajay Kumar Saraogi – Deputy Managing Director and CFO Prashant Seth – President (Business Information and Investor Relations)
Analysts Akshay Shetty, Amit Murarka, Harsh Mittal, Harshal Mehta, Kunal Shah, Milind Raginwar, Navin Sahadeo, Parth Bhavsar, Parvez Qazi, Pathanjali Srinivasan, Rajesh Ravi, Ritesh Shah, Sanjeev Singh, Shravan Shah, Siddharth M., Vaibhav Agarwal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Net Sales (Standalone) | ₹3,132 crores | +19% YoY, +14% QoQ; driven by strong volume growth in Grey and White segments. |
| EBITDA (Standalone) | ₹536 crores | +10% YoY, +22% QoQ; margins at 17.1% vs 18.4% YoY. |
| EBITDA/Tonne (Grey) | ₹928 | -9.2% YoY from ₹1,022; impacted by lower realizations and mix changes. |
| PAT (Standalone) | ₹192 crores | Adjusted for ₹47.8 crore exceptional item for new Labour Code liability; EPS at ₹23.30. |
| Grey Cement Volume | 4.63 million tonnes | +23% YoY, +20% QoQ; significant ramp-up in Central India markets. |
| White Cement Volume | 0.46 million tonnes | +13% YoY, +15% QoQ; steady growth in core value-added segment. |
| Net Debt/EBITDA | 1.41x | Current leverage remains comfortable; expected to reach ~1.6x by March 2026. |
| Cost per Kcal | ₹1.50 | Average fuel rate at ₹7,900/tonne; benefited from increased domestic coal linkage. |
Geographic & Segment Commentary
- Central India: Primary growth driver with Panna Line 2 clinkerization (3.3 MTPA) and grinding units at Hamirpur/Prayagraj commissioned. Management is focusing on establishing a footprint in Eastern UP and Bihar, aiming for mid-to-high double-digit market share.
- North India: Demand remains robust with December 2025 seeing record volumes near-utilization levels. Market share remained stable while the company leveraged Waste Heat Recovery (WHR) and Alternative Fuel Resources (AFR) to manage costs.
- Paint Business: Reported revenue of ₹103 crores for Q3 and ₹285 crores for 9M FY26. Management targets ₹380-390 crores for the full year and expects EBITDA break-even in FY 2027 upon crossing the ₹500 crore revenue threshold.
Company-Specific & Strategic Commentary
- Capacity Expansion: Greenfield Jaisalmer project is in full swing with civil works started; targeted commissioning by September 2027. This includes split grinding units in Punjab and Rajasthan to optimize logistics.
- Efficiency Initiatives: On track to achieve ₹120-125/tonne cost savings by March 2026 through logistics optimization and fuel mix changes. A further ₹25-40/tonne saving is targeted for FY 2027.
- Product Premiumization: Premium product share increased to 17.3% of trade volumes compared to 15.8% YoY, despite overall non-trade volumes rising faster.
- Specialty Products: Greenfield wall putty plant (0.4 million tonnes) in Rajasthan is under construction, expected to commission by September 2026.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Grey Cement Volume | 20 million tonnes (FY 2026) | Reaffirmed guidance; implies ~18-19% full-year growth. |
| Grey Cement Volume | 22.5 - 23 million tonnes (FY 2027) | Expected 12% to 15% growth as new capacities ramp up. |
| Total CAPEX | ₹2,500 - ₹2,800 crores (FY 2026) | Includes ₹600 crores specifically for Jaisalmer Greenfield project. |
| Total CAPEX | ~₹3,500 crores (FY 2027) | Primarily for the 7 million tonne Jaisalmer and related grinding expansions. |
| Incentives | ₹300 crores annual run-rate | Expected by late FY 2027 as Buxar and other new units gain eligibility. |
Risks & Constraints
| Risk | Context |
|---|---|
| Pricing Pressure | Realizations were lower in Q3 due to non-trade price weakness; while Jan-2026 saw a ₹15-20/bag recovery in non-trade, trade price sustainability remains a watch-point. |
| Fuel Cost Volatility | Pet coke prices rose by $7-8 recently alongside rupee devaluation; though mitigated by domestic coal linkages in Central India, North/South plants remain exposed. |
| Leverage | Net debt is expected to rise from 1.41x to ~2.0x during peak Jaisalmer CAPEX in FY 2027, potentially limiting immediate further expansion announcements. |
Q&A Highlights
Pricing & Incentives
- Question: What explains the drop in incentives this quarter? (Amit Murarka)
- Answer: Incentives fell to ₹60 crores from ₹86 crores YoY due to the GST rate cut impact; the company expects a run-rate of ₹75 crores quarterly by the end of FY 2027 (Ajay Kumar Saraogi).
- Question: Have we recovered the realization loss in January? (Kunal Shah)
- Answer: Non-trade prices have improved by ₹15-20/bag across regions, which has relieved pressure on trade prices and allowed for discount restructuring (Ajay Kumar Saraogi).
Capacity & Projects
- Question: When will Panna’s potential reach 4 million tonnes? (Amit Murarka)
- Answer: Currently rated at 3.3 million tonnes; potential for 4 million tonnes will be assessed after 6 months of optimal operations, likely late FY 2027, without major additional equipment (Ajay Kumar Saraogi).
- Question: What is the status of the Buxar unit? (Ajay Kumar Saraogi)
- Answer: It is in advanced stages of completion and should be commissioned within the next 30 days (mid-February 2026).
Operations & Cost
- Question: How does fuel cost per Kcal fall while pet coke rises? (Navin Sahadeo)
- Answer: Mix change is the driver; Central India plants use ~80% domestic Indian coal (70% linkage) which is significantly cheaper than pet coke used in the North (Ajay Kumar Saraogi).
- Question: What is the impact of the exceptional item? (Ritesh Shah)
- Answer: The ₹47.8 crore provision relates to retrospective liabilities under the new Labour Code for gratuity and leave encashment; recurring monthly impact is estimated at ₹3-4 crores (Ajay Kumar Saraogi).
Key Takeaway
JK Cement delivered a robust volume performance in Q3 FY 2026, with Grey Cement volumes growing 23% YoY, significantly outperforming the industry. Standalone Net Sales reached ₹3,132 crores, up 19% YoY, though EBITDA margins contracted to 17.1% from 18.4% due to realization pressures and a higher non-trade mix. The company successfully commissioned its 3.3 MTPA Panna Line 2 clinker unit and is on the verge of starting the Buxar grinding plant. Strategically, the firm is pivoting toward Central and East India while maintaining its North India stronghold. Management maintained its FY 2026 volume guidance of 20 million tonnes and projected a peak CAPEX phase in FY 2027 for the Jaisalmer project. While rising fuel costs and leverage are key monitorables, the company expects margin support from its ₹150/tonne cost-saving program and a turnaround in the paint business by FY 2027. Consistent capacity execution and premiumization remain the central pillars for achieving their 50 MTPA long-term target.
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