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Market share gain in Central India aids volume

JK Cement (JKCE IN) reported EBITDA of ~INR 5.4bn in Q3 FY26 , slightly ahead of our/consensus estimates of ~INR 5.0bn/5.1bn, led by stronger -than -expected volumes given market share gains in Central India , particularly in the non -trade segme nt. Strong volume growth translated into EBITDA growth of ~10% YoY as the negative impact of lower realization was offset by the benefit of operating leverage and lower power and fuel cost. The widening standalone -consolidated EBITDA gap after Q2 indicates a recovery in UAE operations. We expect performance to improve further in the coming quarters , supported by ramp -up in existing capacity, incremental additions, benefit of operating leverage and cost - saving initiatives. Thus, we reiterate Accumulate with a n unchanged SoTP -TP of INR 6,249.

Higher non-trade sale drives volume but weigh on realizations: Grey cement volume rose ~ 22% YoY/ 20% QoQ to 5.32mn tonnes due to improved market share in Central India . White cement (including wall putty) volume rose ~12% YoY/ 4% QoQ to 0.46mn tonnes. Grey cement realization fell ~ 1% YoY /3% QoQ to INR 4, 724 /tonne , due to lower trade sales ( at 60% versus 67% in Q2FY26 ). White Cement (including putty) realization fell ~ 3% YoY /2% QoQ to INR 11,694 /tonne. Blended operating costs fell ~2% YoY and ~7% QoQ to INR 4,637/tonne, driven by lower power and fuel costs following a favorable change in fuel mix, along with improved fixed -cost absorption. Other operating income per tonne fell ~ 21% YoY and ~ 24% QoQ due to reduction of incentive income on account of reduction in GST rates. Thus , b lended EBITDA/tonne (including other operating income) fell 9% YoY , but rose ~ 3% QoQ to INR 92 8.

Capacity expansion on track to drive volume growth: In December 2025, JKCE commissioned 3.0mn tonne s clinker unit at Panna (Madhya Pradesh). Further, in January 2026, it added 1.0mn tonne s grinding capacity each at Panna and Hamirpur (Uttar Pradesh) . The 3.0mn tonne s grinding unit at Bihar is progressing as planned , with commissioning likely by Q4FY26. Also, the 4.0mn tonne s clinker unit, 3.0mn tonne s grinding unit at Jaisalmer along with 2.0mn tonne s split grinding unit s in Rajasthan and Punjab each should be commission ed by H1FY28. Post completion, cement capacity will rise from ~24mn tonnes in FY25 to ~3 8mn tonnes in FY2 8.

Reiterate Accumulate with an unchanged TP of INR 6,249: We expect JKCE’s near -term volumes to remain strong , supported by demand recovery and sustained capacity additions in the region (which shall continue to drive market share gains ). Further, a robust pipeline of ongoing expansion projects underpins long -term volume growth visibility. In the near -term , price hike in the non -trade segment and seasonal demand should drive earnings. We largely retain our EBITDA estimates for FY26 E -28E and roll forward to December 2027E from September 2027E. We ascrib e 14.0x (unchanged) December 2027E to grey cement, 16x (unchanged) December 2027E to white cement (including wall putty) and 4x (unchanged) December 2027E EV/sales to the paint business. Reiterate Accumulate with an unchanged TP of INR 6,249 . Subdued demand, weak pricing, and higher fuel costs remain key risks

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