J.K. Cement Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

2
Ajay Kumar Saraogi, Prashant Seth

Analysts

12
Amit Murarka, Girija Shankar Ray, Harsh Mittal, Navin Sahadeo, Patanjali Srinivasan, Pinakin Parekh, Prateek Kumar, Raghav Mashewari, Rajesh Ravi, Ritesh Shah, Siddhart, Tejas

Financials & KPIs

Geographic & Segment Commentary

• North India: Grey volumes grew in line with the market; effective capacity utilization at 85-90% with no incremental capacity available. Fuel mix includes Indian coal (rail-sourced) supplemented by pet coke and alternate fuels; imported US coal used opportunistically when economics are favorable.
• Central India: Primary growth engine; Panna and the Bihar grinding unit drove the 19% YoY grey volume growth with market share gains. Panna overall utilization above 65%; Line 2 debottlenecking from 3.3 to 4 MTPA expected within FY27. Operates entirely on domestic fuel—no pet coke or imported coal.
• South India: Grew in line with market; operates only on pet coke and alternate fuels as Indian coal is not viable at this location.
• White cement & putty: Volumes up 11% YoY with ~4% QoQ realization improvement, aided by disrupted UAE imports into India. Competitive intensity expected to return as imports normalize; 0.6 MTPA wall putty expansion at Nathdwara commissioning in Q2 FY27 to reduce toll-manufacturing dependence.
• UAE (Fujairah): White cement sales restricted to GCC countries due to ship-loading unavailability from the geopolitical situation; ~50% of normal volume lost in Q1. Freight costs increased as dispatches outside GCC were suspended.
• RMC (Ready-mix concrete): 17 plants operational vs 5 at FY26 exit; Q1 revenue ₹35-40 crores vs ~₹5 crores in Q4 FY26; scaling toward 50 plants by FY27 and 100 by FY28. Positioned as a 4-7% EBITDA margin business that protects cement volumes on large projects.
• Paints (JK Maxx / Acro): Q1 revenue ₹125 crores with EBITDA breakeven achieved; FY27 revenue target ₹500-550 crores. Capex capped at ₹600 crores; leverages the existing putty distribution platform for customer retention.

Company-Specific & Strategic Commentary

• Capacity expansion: Jaisalmer greenfield on track for H1 FY28 commissioning; Bhatinda grinding unit progressing well; land acquired for a second split grinding location in Punjab. 40 MTPA by FY28 and 50 MTPA by FY30 targets unchanged with no rescheduling planned.
• Coal block development: Mahan coal block expected to commission by end FY28, with the second block ~1 year later; expected to deliver substantial fuel cost savings and reduce exposure to imported fuel price volatility; external coal sale to be evaluated.
• Fuel strategy: Q1 fuel mix was 40% pet coke, 45% Indian coal, balance alternate fuels; mix evolves continuously based on geopolitical availability and pricing rather than being fixed.
• Building materials ecosystem: RMC and paints expansions are strategic complements to cement/putty—RMC enables entry into large projects, while paints prevent customer loss at the paint counter and support putty volume growth.
• Capex pipeline: ₹3,500 crores planned for FY27 and ₹1,200 crores for FY28; the next phase of clinker expansion (Muddapur priority) to be taken to the Board closer to Jaisalmer commissioning—potentially end of this fiscal or Q4 FY27.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Volume Growth Drivers & Regional Market Share

• Question: How much of the volume growth came from new plants, and how are regions performing? (Patanjali Srinivasan, Sundaram Mutual Fund)
• Answer: Major growth driven by Central India expansion including the Bihar grinding unit; North and South grew in line with market as no excess capacity exists there. Market share gained in Central India, maintained in North and South. (Ajay Saraogi)

Pricing Outlook & FY27 Volume Guidance

• Question: Where are prices vs Q1 average, and can ~16-17% growth be sustained? (Pinakin Parekh, HSBC)
• Answer: Prices are flat vs Q1 average; no monsoon price drop expected despite seasonality due to cost pressures. FY27 grey volume target is 22.5-23 million tons with double-digit growth, but incremental volumes are capped by North/South capacity availability. (Ajay Saraogi)

White Cement Performance & UAE Import Dynamics

• Question: What is driving ~28-29% white volume growth with 4% QoQ realization increase—is competitive intensity reducing? (Navin Sahadeo, ICICI Securities)
• Answer: Disruption in UAE imports into India created an incremental volume opportunity for white cement and putty; some benefit may extend into Q2, but competitiveness in putty will return as imports normalize. (Ajay Saraogi)

RMC Business Scale-Up

• Question: What is the RMC revenue trajectory and profitability outlook? (Navin Sahadeo, ICICI Securities; Prateek Kumar, Jefferies; Rajesh Ravi, HDFC Securities)
• Answer: 17 plants operational vs 5 at FY26 exit; Q1 revenue ₹35-40 crores vs ~₹5 crores in Q4 FY26; FY27 target ~₹250-300 crores with exit quarterly run-rate of ~₹100 crores. RMC is a 4-7% EBITDA margin business required to protect cement volumes on large projects. (Ajay Saraogi)

Paints Business Strategy & Financials

• Question: What have been the learnings, long-term plans and current financials? (Siddhart, Kotak Securities; Rajesh Ravi, HDFC Securities)
• Answer: Capex capped at ₹600 crores; Q1 revenue ₹125 crores with EBITDA breakeven; FY27 target ₹500-550 crores. Paints support putty volumes by retaining customers at the paint counter; FY28 target ~₹700 crores top line with 5-7% EBITDA margin. (Ajay Saraogi)

Coal Blocks & Fuel Mix Evolution

• Question: What is the timing and savings from coal blocks; can coal be sold externally? What is the current fuel mix? (Siddhart, Kotak Securities; Ritesh Shah, Investec Capital)
• Answer: Mahan coal block commissioning by end FY28, second block ~1 year later; substantial cost savings and reduced geopolitical risk exposure; external coal sale to be evaluated. Q1 fuel mix: 40% pet coke, 45% Indian coal, balance alternate fuels; mix evolves continuously with availability and pricing. (Ajay Saraogi)

Q2 Cost Outlook & Fuel Cost Peak

• Question: Is the ₹150/ton Q2 increase net of lower maintenance, and what will fuel cost per kilocalorie be? (Patanjali Srinivasan, Sundaram Mutual Fund; Tejas, Citi Group; Prateek Kumar, Jefferies)
• Answer: ₹150/ton comprises ~₹100 fuel and ~₹50 diesel/other costs; maintenance similar or marginally lower QoQ; operating deleverage additional. Fuel cost expected to peak at ~₹1.75 per kilocalorie in Q2, declining thereafter. (Ajay Saraogi)

Green Power & Thermal Substitution Targets

• Question: When will green power mix and thermal substitution rate increase toward FY30 targets? (Tejas, Citi Group)
• Answer: Green power to add 4-5% annually from next year; state-level approval delays slowed solar additions. Thermal substitution target being reworked as earlier calculation excluded post-expansion capacities. (Ajay Saraogi)

Capex, Panna Debottlenecking & Next Expansion Phase

• Question: What are the capex numbers and timing for the next clinker line? Will Panna reach 4 MTPA this fiscal? (Amit Murarka, Axis Capital; Harsh Mittal, Emkay Global)
• Answer: FY27 capex ₹3,500 crores, FY28 ₹1,200 crores; next expansion decision closer to Jaisalmer commissioning (end of this fiscal/Q4 FY27), with Muddapur as priority. Panna Line 2 debottlenecking to 4 MTPA achievable this fiscal; no clinker shortage foreseen for Central India. (Ajay Saraogi)

Incentive Income Trajectory

• Question: What incentive income is expected from FY29 once Jaisalmer, Bikaner and Bhatinda operationalize? (Raghav Mashewari, Equirus Securities)
• Answer: FY29 expected at ₹225-250 crores, moving toward ~₹300 crores annually; GST input credit currently offsets some subsidy recognition. (Ajay Saraogi)

Key Takeaway

JK Cement delivered strong Q1 FY27 volume growth—grey volumes up 19% YoY and consolidated net sales up 22% to ₹3,962 crores—driven by Central India expansion with market share gains, while North/South remained capacity-constrained at 85-90% utilization. Profitability contracted sharply with standalone EBITDA margin at 16.9% (vs 21.9% YoY) and per-ton EBITDA at ₹982 as pet coke and diesel costs surged, with Q1 absorbing ₹50-60 crores preponed maintenance. Management guided Q2 costs up ₹150/ton with fuel cost peaking at ~₹1.75 per kilocalorie, expects flat monsoon pricing, and maintained FY27 grey volume guidance of 22.5-23 million tons. Paints achieved EBITDA breakeven (₹125 crores revenue), RMC scaled to 17 plants with ₹250-300 crores FY27 revenue targeted, and Jaisalmer commissioning remains on track for H1 FY28. Key watch points: geopolitical fuel escalation, UAE white cement shipping restrictions, and the next-phase expansion decision expected by end of this fiscal.