💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations for Q2 FY26 grew 19% YoY to INR 2,859 Cr from INR 2,410 Cr. For H1 FY26, revenue increased 19% to INR 6,049 Cr compared to INR 5,070 Cr in the previous year. While segment-specific revenue splits were not fully detailed, the grey cement volume growth was a primary driver, with H1 FY26 seeing a 15% volume increase.

Geographic Revenue Split

The company has a diversified presence across 19 states. As of FY25, the Northern region contributed 33% (down from 37% YoY) and the Central region contributed 39% (up from 36% YoY). Other regions include Gujarat (8%), Maharashtra (8%), and Karnataka (8%).

Profitability Margins

Profitability showed significant YoY improvement. Profit Before Tax (PBT) for Q2 FY26 was INR 261 Cr, a 335% increase from INR 60 Cr in Q2 FY25. H1 FY26 PBT reached INR 758 Cr, up 117% from INR 348 Cr. Net Profit after tax for the first half of fiscal 2025 was reported at INR 321 Cr compared to INR 286 Cr in the prior year.

EBITDA Margin

EBITDA margin for Q2 FY26 stood at 15.9%, up from 11.5% YoY. H1 FY26 EBITDA margin was 19.1% compared to 15.2% YoY. EBITDA per ton for Q2 FY26 improved to INR 902 per ton, a 41% increase from INR 639 per ton in the previous year, driven by cost optimization and higher realizations.

Capital Expenditure

Planned capital expenditure remains elevated to support the 50 MTPA target. FY26 Capex is guided at approximately INR 3,500 Cr (+/- INR 200 Cr). Annual maintenance and expansion capex for FY25 and FY26 was previously estimated at INR 1,500-2,000 Cr per year.

Credit Rating & Borrowing

The company maintains a strong credit profile with a 'CRISIL A1+' rating on its INR 500 Cr Commercial Paper. Net debt stood at INR 4,399 Cr as of March 31, 2025, with a net debt/EBITDA ratio of 2.15x. Gearing was comfortable at 1.06x in FY25.

⚙️ Operational Drivers

Raw Materials

Key raw materials include limestone, coal, and petroleum coke. While specific cost percentages per material were not disclosed, power and fuel typically represent a significant portion of cement manufacturing costs. The company is targeting a Thermal Substitution Rate (TSR) of 35% by 2030 to reduce reliance on traditional fuels.

Import Sources

The company sources petroleum coke from domestic markets and relies on imported coal to meet its fuel requirements. Specific countries of origin for coal were not listed, but the company utilizes fuel supply agreements (FSA) for a portion of its needs.

Key Suppliers

Suppliers include JSW Neo Energy Limited (from whom a 12.21% stake in O2 Renewable Energy V Private Limited was acquired) and various domestic petcoke and coal providers.

Capacity Expansion

Current grey cement capacity is 25.26 MTPA (as of Q1 FY26), following debottlenecking at the Ujjain plant (from 1.5 to 2.0 MTPA). The company plans to reach 50 MTPA by FY2030. Upcoming expansions include 6 MTPA by December 2025 across Panna, Hamirpur, and Prayagraj, and new grinding units in Punjab and Rajasthan by Q2 FY28.

Raw Material Costs

Raw material costs are managed through a mix of FSAs and open market purchases. The company is implementing cost-saving measures expected to yield INR 75-90 per ton in savings by FY26 and an additional INR 75-80 per ton in FY27 through efficiency improvements.

Manufacturing Efficiency

Efficiency is driven by WHRS and debottlenecking. The company achieved a water positivity of 4.5 times in fiscal 2024, with a target of 5 times by 2030. Capacity utilization remains healthy, supporting the 15% volume growth seen in H1 FY26.

Logistics & Distribution

The company is expanding its grinding unit footprint (Prayagraj, Hamirpur) to be closer to end markets, which reduces lead distances and distribution costs as a percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

10%

Growth Strategy

Growth will be achieved by doubling grey cement capacity to 50 MTPA by 2030. Key steps include the acquisition of Saifco Cements (0.42 MTPA) for INR 149.81 Cr to enter the J&K market, a INR 600 Cr investment in the paint business (JK Maxx Paints), and a Go-To-Market (GTM) strategy for the upcoming Jaisalmer project (expected in 15-18 months).

Products & Services

Grey cement (OPC, PPC, PSC), White Cement, Wall Putty, and Decorative Paints.

Brand Portfolio

JK Super Cement, JK Super Strong Cement, JK Cement White Max, JK Cement Wall Max, and JK Maxx Paints.

New Products/Services

The company is ramping up its Paints business through JK Maxx Paints and exploring Calcine Clay (LC3) cement. The paint business is expected to reach EBITDA break-even by next fiscal year.

Market Expansion

Strategic entry into Jammu & Kashmir via the Saifco acquisition and expansion in the Central region (Panna, Prayagraj). The company is also strengthening its presence in the Eastern market through Toshali.

Market Share & Ranking

JK Cement is one of the top five cement manufacturers in the Northern and Central regions and is one of the largest white cement and wall putty manufacturers globally.

Strategic Alliances

Acquired a 28.97% stake in O2 Renewable Energy V Private Limited (SPV) to secure renewable power. The company also operates a dual-process plant in the UAE through its subsidiary J.K. Cement Works (Fujairah) FZC.

🌍 External Factors

Industry Trends

The industry is seeing massive capacity additions (160 million tons expected by FY28). Top players are becoming aggressive on cost reduction and premiumization. JK Cement is positioning itself by shifting to green energy (75% target) and expanding into high-margin segments like paints.

Competitive Landscape

Faces intense competition from larger players who are aggressively expanding capacity and reducing costs. The industry is undergoing consolidation, as evidenced by JK Cement's own acquisitions of Saifco and Toshali.

Competitive Moat

The company's moat is built on its dominant position in the white cement duopoly and its strong brand equity ('JK Super'). These advantages are sustainable due to high entry barriers in white cement and an established pan-India distribution network.

Macro Economic Sensitivity

Cement demand is highly correlated with GDP growth and government infrastructure spending. Cyclical downturns in the economy directly impact unit realizations and sales volumes.

Consumer Behavior

Increasing demand for 'green' construction materials and integrated solutions (cement + putty + paint) is driving the company's diversification and ESG initiatives.

Geopolitical Risks

Imported coal dependency exposes the company to international trade disruptions and global commodity price spikes.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental norms regarding emissions and waste generation. The company is proactively increasing its TSR to 35% to stay ahead of potential carbon-related regulations.

Environmental Compliance

The company is focused on ESG to enhance stakeholder confidence. It aims to be 5 times water positive by 2030 and has already achieved 4.5 times positivity as of FY24.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the successful integration and turnaround of acquisitions like Saifco and Toshali, and the ability to maintain EBITDA/ton above INR 700 amidst industry-wide capacity surges.

Geographic Concentration Risk

The company has high concentration in the Northern (33%) and Central (39%) regions, making it sensitive to regional pricing dynamics and infrastructure project timelines in these areas.

Third Party Dependencies

Dependency on external suppliers for coal and petcoke, and reliance on JSW Neo Energy for renewable energy SPV shares.

Technology Obsolescence Risk

The company is mitigating technology risks by investing in WHRS, green energy, and new product developments like LC3 cement.

Credit & Counterparty Risk

Liquidity is strong with cash and equivalents of over INR 1,500 Cr, and fund-based working capital limits of INR 800 Cr were utilized at 71% through October 2024.