JK Cement Ltd Quarterly Results Q4 FY 25 stock analysis

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Sector Outlook: Positive

Strong operational performance with robust volume growth and strategic expansion on track

JK Cement Ltd. (JKCE) reported operating revenue of Rs. 35,812 million (up 22.2% QoQ / up 15.3% YoY) due to strong sales volume growth during the quarter, mainly in central India, where most capacity ramp-ups have been done. The company’s Grey Cement capacity stood at 5.5 MT, while its White Cement and Wall Putty volumes stood at 0.6 MT during the quarter, with total volume increasing to 6.1 MT compared to 4.9 MT in Q3FY25 and 5.2 MT in Q4FY24. The company reported an EBITDA of Rs. 7,649 million (up 55.4% QoQ / up 36.6% YoY). Its EBITDA margin stood at 21.4%, compared to 18.0% in the same quarter of the previous year and 16.8% in the last quarter. The company’s EBITDA/ton improved to Rs. 1,265 during the quarter, compared to Rs. 1,040 in Q3FY25 and Rs. 1,078 in Q4FY24. This was due to stronger cement realizations and better cost management during Q4FY25. Freight costs were higher during the quarter and stood at Rs. 8,244 million (up 24.8% QoQ / up 21.1% YoY), due to higher lead distance. Power and fuel expenses stood at Rs. 5,644 million (up 2.0% QoQ / down 8.3% YoY). The decline on an annual basis was due to the increased share of green power mix and continued efforts to improve the share of green power and AFR. The company’s profit increased significantly and stood at Rs. 3,613 million (up 90.3% QoQ / up 64.5% YoY). The board has recommended a dividend of Rs. 15 (150%) per equity share of Rs. 10 each for FY25.

Key Concall Highlights

Capacity expansion:

The Panna Expansion (brownfield) and Bihar Grinding Unit (greenfield), projected to produce 6 MTPA, are on track and expected to be operational by December 2025 or January 2026.
JK Cement aims to become a 50 MTPA producer by 2030. Next expansion options being evaluated include Jaisalmer, Karnataka, Odisha, and another Panna line.
The Panna line 2 expansion will be completed in December 2025, which will provide good leeway for growth beyond FY26.

Guidance:

Management has provided CapEx guidance of Rs. 1,800 crores to Rs. 2,000 crores for FY26.
In FY26, the volume guidance is 20 MTPA for grey cement, with central India and Bihar expected to contribute most of the incremental growth.
FY26 paint revenue is projected to be between Rs. 400 crores and Rs. 450 crores, with an expected revenue of Rs. 600 crores in FY27.

Volumes:

Clinker production for FY25 reached 11.92 million tonnes, with 82% utilization.
Premium cement sales stood at 15% in Q4 FY25 and are expected to rise to 15–17% in FY26.
White cement and putty volumes are expected to remain flat in FY26 due to intense competition and declining realizations.

Cost Control & Operational Efficiency:

Despite increased lead distances due to expansion into Bihar, freight costs were managed effectively through better negotiations, enhanced dispatch efficiency, and reduced detention.
Green energy usage is projected to increase to 60% by FY26, up from the current 51%.
The company has ongoing discussions with Container Corporation of India regarding bulk cement transport through tank containers and LNG logistics to optimize freight and reduce carbon footprint.

Other key concall highlights:

The UAE white cement plant has become profitable, now contributing Rs. 15 crores to Rs. 20 crores in EBITDA per quarter.
Trade mix significantly increased to 71% in Q4FY25, up from 66%, mainly due to growth in new markets such as Bihar, which are entirely trade-led.
Post-March price increases were approximately 1% in North and Central India and 5-7% in the South, particularly in Karnataka.

Valuation and Outlook

JK Cement Ltd. delivered strong performance during the quarter, which was supported by a sharp improvement in volumes and operational leverage. The quarter reflects the benefits of earlier capacity investments, particularly in Central India, where ramp-up has supported scale and efficiency. This growth is expected to continue in the coming quarters, supported by robust cement demand and better realizations. The company remains focused on its long-term growth roadmap, targeting a significant scale-up in production capacity by 2030. The company has a strong presence in the northern and central regions of India. It remains on track to meet its FY26 targets, including other expansion plans, such as the grinding unit in Bihar. Near-term expansions in Panna and Bihar will further diversify its regional footprint and volume base. These strategic expansions are expected to help the company penetrate new markets and strengthen its market presence. Management also remains committed to enhancing brand visibility and trade presence, supported by investments in premium product positioning and marketing. While white cement and putty segments are witnessing price pressure due to high competitive intensity, international operations and the dry mix segment are helping maintain profitability. The paints business, though currently loss-making, is on a clear path toward operational stability and margin improvement. Overall, with the government’s focus on infrastructure development and the company’s strategic growth plan driven by scale, efficiency, and market expansion, JK Cement is well-positioned for growth in the coming quarters.