Company Update : JK Lakshmi Cement Ltd by Motilal Oswal Financial Services Ltd
Earnings in line; EBITDA/t at INR936 (est. INR948)
* JKLC’s 1QFY26 EBITDA was in line with our estimates due to higher-thanestimated volumes (~6% above estimates). Consol. EBITDA increased ~40% YoY to INR3.1b (in line), and EBITDA/t increased ~27% YoY to INR936 (est. INR948). OPM surged 3.7pp YoY to ~18% (est. 18%). Adj. PAT increased ~63% YoY to INR1.5b (19% above our estimate).
* The company is expanding grinding capacity at the Surat plant by 1.35mtpa to 2.7mtpa at a cost of INR2.25b, and this project will be completed in 2QFY26. The first phase of the railway siding at the Durg plant (capex: INR3.25b) has been completed. The Durg expansion (2.3mtpa clinker and 1.2mtpa integrated grinding capacity along with three split GUs of 3.4mtpa aggregate capacity at a capex of INR30b) will be completed in two phases: 1) Clinker plant with 2.4mtpa grinding capacity by Mar’27 and 2) 2.2mtpa grinding capacity by Mar’28.
* We have a BUY rating on the stock and will review our assumptions following the conference call with the management.
Sales volume rises 10% YoY; realization/t improves 1% YoY
* Consolidated revenue/EBITDA/adj. PAT stood at INR17.4b/INR3.1b/1.5b (up 11%/40%/63% YoY and in line/in line/ up 19% vs. our estimate). Sales volume increased 10% YoY to 3.3mt. Realization/t was up 1% YoY/down 1% QoQ at INR5,234/t (in line).
* Opex/t dipped 3% YoY (~1% below estimate) due to ~14% YoY reduction in variable costs, while freight costs/employee costs/other expenses per ton increased 15%/11%/3% YoY. OPM surged 3.7pp YoY to ~18%, and EBITDA/t increased 27% YoY to INR936 in 1QFY26. Depreciation/finance costs were up 8% YoY (each). Other income was up 70% YoY.
Highlights from the management commentary
* The share of green power stood at ~49% in 1QFY26 vs. 50% in FY24/ 4QFY25. The company is implementing a project to increase the TSR share to 16% from 4% at its Sirohi plant in a phased manner.
* The Board approved the appointment of Mr. Shrivats Singhania as an Additional Director designated as Deputy Managing Director for a period of five years. Mr. Arun Kumar Shukla was reappointed as the President and Director for a period of three years.
Valuation and view
? JKLC’s operating performance was in line with our estimates, driven by higher volumes. During the conference call, we will seek clarification on the status of various ongoing expansion plans. We have a BUY rating on the stock. However, we will review our assumptions after the conference call on 4 th Aug’25 (Concall Link).
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