JK Cement Ltd Quarterly Results Q3 FY 25 stock analysis

Home » Financial News Hotbox » Results » JK Cement Ltd – Q3FY25 Result Update

Sector Outlook: Positive

Strong sequential growth driven by steady momentum and strategic expansions

JK Cement Ltd. (JKCE) recorded revenue of Rs. 29,303 million in Q3FY25, showing a 14.5% increase from last quarter but remaining almost the same compared to last year. The growth was due to higher demand during the quarter.

The company’s EBITDA stood at Rs. 4,921 million, which was up 73.3% compared to last quarter but down 21.3% compared to last year. The EBITDA margin improved to 16.8%, up from 11.1% in the last quarter but lower than 21.3% a year ago. The earnings per ton also improved, reaching Rs. 1,040 per ton, compared to Rs. 649 last quarter but lower than Rs. 1,335 a year ago.

Freight costs increased to Rs. 6,604 million (up 14.8% from last quarter and 7.4% from last year), while power and fuel expenses were Rs. 5,531 million, which was 12.2% higher than last quarter but 15% lower than last year due to lower fuel prices and increased use of green energy.

The company’s profit for the quarter was Rs. 1,899 million, up 39.5% from last quarter but 33.1% lower than last year.

Regarding production capacity, Grey Cement capacity stood at 24.34 MTPA, while White Cement and Wall Putty capacity stood at 3.05 MTPA.

JK Cement has acquired a 60% stake in Saifco Cement in the Jammu & Kashmir region, adding 0.42 MTPA capacity and 0.26 MTPA clinker capacity. Saifco Cement is already profitable, operating at 40% of its capacity with EBITDA margins of Rs. 1,500 per ton. JKCE aims to expand this acquisition to boost overall profitability.

Key Concall Highlights

Orissa Plant: The company is making final modifications to its acquired Orissa plant, which will be fully operational from next financial year and contribute to profits.
Toshali Plant Losses: JKCE incurred Rs. 9 crore losses at the Toshali plant due to a lack of a long-term limestone supply arrangement. The clinker unit is operational, and required modernizations are expected to be completed by next quarter, making it profitable post-FY25.
Saifco Cement Expansion: The company plans to increase Saifco’s capacity to 60%-70% within six months and 100% within 1 to 1.5 years. Saifco benefits from 100% exemption from SGST and GST until 2031.
Expansion Plans: JKCE is exploring expansions in Jaisalmer and Muddapur, with Jaisalmer approvals expected by June.
Pet Coke Purchase: In December, JKCE secured pet coke at favorable rates ($95-$105) but anticipates price increases soon.
White Cement Business: Overseas white cement sales improved due to Dubai’s real estate boom. The Fujairah plant achieved 85% capacity utilization and an EBITDA of Rs. 24 crores.
Putty Market Competition: JKCE faces strong competition from Asian Paints and Birla in the putty segment, limiting its growth to 4% while Asian Paints saw double-digit growth.
Regional Growth Strategy: The northern market showed stable growth, while the company is expanding in the central region with major investments
Putty Supply Disruption: JKCE currently supplies 1 lakh tons of putty to Asian Paints, but this may reduce next year as Asian Paints sets up its own plant in the UAE.
Future Cost Challenges: By 2030, leased plants in North India will be re-auctioned, which could increase costs, but JKCE is well-positioned in the Central region.
Growth Projections: JKCE expects 7%-8% growth in grey cement next quarter. Revenue from paint sales is projected at Rs. 450 crores in FY26 and Rs. 600 crores in FY27. Premium cement sales are expected to exceed 20% of total sales within two years.

Valuation and Outlook

JK Cement Ltd. showed strong growth this quarter, mainly due to higher cement prices and better efficiency. This growth is expected to continue in the next few months, helped by rising cement demand and good pricing. The company has a strong presence in North and Central India, with big growth opportunities in Central India. It aims to reach a cement production volume of 21.6 MTPA by FY26, supported by high regional demand, expansion plans, and better capacity usage.

To meet its FY26 targets, JK Cement is working on several expansion projects, including a new grinding unit in Bihar. The company has increased its FY26 capital investment target to Rs. 1,750 million to expand Saifco Cement, which will help it enter new markets and strengthen its business. With government investments in infrastructure and its strategic growth plans, JK Cement is well-prepared for continued success in the coming quarters.