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Est. vs. Actual for Q4FY25: Revenue – BEAT; EBITDA Margin –  BEAT; PAT – BEAT

Change in Estimates post Q4FY25 (Abs)

FY26E/FY27E: Revenue: 0.5%/2%; EBITDA: 0%/4%; PAT: 0.5%/7%

Recommendation Rationale

Volume growth visibility remains intact: The company’s capacity expansion program, aiming to add 6 MTPA, is progressing well and will bring its total Grey Cement capacity to 30.3 MTPA from the current 24.3 MTPA, representing a 13% capacity CAGR over FY23–FY26. The ramp-up of recently commissioned capacity and ongoing expansions (6 MTPA) is anticipated to support robust volume growth in the coming periods. Given these developments, the company is expected to achieve a volume CAGR of 12% over FY24–FY27E.

EBITDA margins to improve: The company delivered a strong operating performance during the quarter, driven by higher realisations and positive operating leverage, resulting in a 26% QoQ improvement in EBITDA per tonne, reaching Rs 1,262. This positive trend is expected to continue in FY26, supported by robust cement demand and better realisations. Management has projected cost savings of Rs 150–200 per tonne over the next two years. As a result, the company is anticipated to achieve an EBITDA margin in the range of 19%–20% in FY26E/FY27E, driven by higher volumes, improved realisations, and continued cost optimisation efforts.

Central India to aid in revenue growth: Upon the completion of ongoing and planned capacity expansions, Central India is expected to contribute approximately 40% of the company's total Grey Cement capacity. The government's heightened focus on infrastructure development in the region is likely to drive a significant increase in per-capita cement consumption in the coming years. With its strategic expansion initiatives, the company is well-positioned to benefit from the rising cement demand in this region.  Accordingly, we project a revenue CAGR of 10% over FY24-FY27E.

Sector Outlook: Positive

Company Outlook & Guidance: JKCL targets 10% volume growth in FY26, outpacing the industry estimate of 7–8%, reinforcing its strong market position. Cement prices are currently 1–2% higher in the North and Central regions and 5–7% higher in the South compared to Q4FY25 levels. Management notes that market dynamics will play a decisive role in price sustainability — making pricing trends a key monitorable in FY26. Cement demand is expected to remain robust through the year, supporting topline momentum. Management highlighted challenges in the White Cement and Putty business on the back of increasing competitive intensity.

Current Valuation : 15xFY27 EV/EBITDA; ( Earlier Valuation : 15x FY26 EV/EBITDA)

Current TP: Rs 5,740/share; ( Earlier TP: Rs 5,380/share)

Recommendation: We maintain our BUY recommendation on the stock.

Alternative BUY Ideas from our Sector Coverage:

UltraTech Cement (TP – 13,510/share),   Dalmia Bharat Ltd (TP - Rs 2,260/share), Ambuja Cement (TP - 655/share), ACC Ltd (TP - 2,420/share), Birla Corp (TP - Rs 1,560/share), Star Cement (TP - 270/share), Shree Cement (TP- 33,960/share)

Financial Performance

JKCL delivered a strong operating performance during the quarter, driven by positive operating leverage, higher Cement realisations and volume growth QoQ/YoY. The company reported revenue, EBITDA, and PAT growth of 15%, 37%, and 64% YoY, respectively. APAT stood at Rs 360 Cr, reflecting a 64% YoY increase. EBITDA margins came in at 21.4%, above the anticipated 19.4%, and higher than 18% YoY. Consolidated volumes for the quarter, including both Grey and White Cement, reached 6.06 mtpa, marking a 16% YoY growth. The combined EBITDA per tonne improved to Rs 1,262, up 18% YoY. Cement realisations per tonne (Grey) increased by 2% QoQ to Rs 4,899, while the cost per tonne declined by 6% /5% QoQ/YoY to Rs 4,647.

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