JK Cement Ltd Quarterly Results Q1 FY 26 stock analysis

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Sector Outlook: Positive

Strong volume growth in key markets; Green energy and expansion plans drive optimism

JK Cement Ltd. (JKCE) reported operating revenue of Rs. 33,525 million (down 6.4% QoQ / up 19.4% YoY). The annual increase was mainly due to strong sales volume growth in South and central regions during the quarter. While, this was impacted sequentially due to muted sales in the North. The company’s Grey Cement volume increased by 15% YoY, while its White Cement and Wall Putty volumes increased by 8% YoY during the quarter, and total volume stood at 5.0 MT compared to 5.4 MT in Q4FY25 and 4.9 MT in Q1FY25. The company reported an EBITDA of Rs. 6,877 million (down 10.1% QoQ / up 41.4% YoY). Its EBITDA margin stood at 20.5%, compared to 17.3% in the same quarter of the previous year and 21.4% in the last quarter. The company’s EBITDA/ton stood at Rs. 1,247 during the quarter, compared to Rs. 1,265 in Q4FY25 and Rs. 1,014 in Q1FY25. This was due to improved cement realizations, mainly in the catchment area of the Muddapur unit during Q1FY26. Freight costs during the quarter stood at Rs. 7,649 million (down 7.2% QoQ / up 23.5% YoY), due to an increase in lead distance by 2 km. Power and fuel expenses increased during the quarter and stood at Rs. 5,981 million (up 6.0% QoQ / up 5.0% YoY). This increase was a result of higher pet coke prices, due to an increase in the average consumption rate, and likely also due to balanced clinker production during the quarter. The company’s net profit increased significantly on an annual basis and stood at Rs. 3,243 million (down 10.3% QoQ / up 75.4% YoY).

Key Concall Highlights

JK Cement (JKCE) is on track to expand its grey cement capacity from 25.26 MTPA to 31.26 MTPA by end-2025, driven by new plants in MP, UP, and Bihar, along with debottlenecking in South India. The company targets 50 MTPA capacity by FY30 and is enhancing clinker capacity to 19.6 MTPA post-Panna expansion. It approved a ₹195 crore investment to expand wall putty capacity in Rajasthan and continues growing its paint business, with ₹450 crore already invested and breakeven expected by FY27. JKCE has secured 250 million tonnes of limestone from GMDC to support long-term growth in western India. In green energy, it plans to raise its green power share from 52% to 60% by FY26 and to 75% by FY30, aiming for cost efficiency. The company maintains a strong financial profile with a target net debt-to-EBITDA ratio below 2x. In Q1FY26, grey cement volumes rose 15% YoY, and white cement volumes increased 8%, although constrained by capacity. JKCE is expanding its footprint in Bihar, aiming for 1 MTPA sales this fiscal, and maintains full-year volume guidance at 20 MTPA. It targets ₹150–200/tonne cost savings over 2–3 years, driven by higher green energy use, logistics, blending, and gypsum optimization. The company completed the Saifco acquisition in J&K, with plans to upgrade kiln capacity and explore long-term expansion. Progress on the Toshali acquisition in Odisha remains slow due to mining lease delays, though the company is pursuing alternative raw material sources. White cement and wall putty segments saw robust seasonal demand, while freight costs rose slightly due to deeper penetration in Bihar.

Valuation and Outlook

JK Cement Ltd. delivered a strong performance during the quarter, despite facing seasonal challenges and weaker demand in certain regions. The company witnessed strong growth in cement volumes in Central India and the South, due to its continued efforts to expand its presence and sell in those markets. This highlights its ability to penetrate new markets and ramp up distribution in high-demand areas. While north markets saw muted performance, management’s commentary suggests that the company’s focus is shifting towards regions where it can benefit from upcoming capacities and dealer network expansion, particularly in Bihar and the eastern region. On the cost side, while there were challenges from higher fuel prices and extended logistics distances, the company effectively managed other operating expenses, supported by its ongoing efforts to increase the share of green power, which is expected to rise to 60% by the end of FY26. The company’s capacity expansion is well on track, with its project pipeline across greenfield and brownfield sites expected to lift overall capacity to around 32 million tonnes by FY26. The company is expanding its white cement and wall putty segment while maintaining stable margins, as it expects around 10% volume growth, which will help JKCE maintain its market share. Management remains optimistic on demand, aiming to outpace industry volume growth, and shows readiness to adapt in response to emerging regional opportunities and cost challenges. Overall, JK Cement appears well-positioned on a strong growth path, steady expansion, and a wider presence across India.