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Earnings in line; EBITDA/t at INR733 (est. INR736)

* JKLC’s 2QFY26 EBITDA was in line with our estimates at INR2.1b (+133% YoY, albeit on a low base) as the benefit of better realization was offset by higher-than-estimated opex/t. Sales volumes grew 15% YoY (+4% vs. estimates). EBITDA/t was at INR733 (est. of INR736) vs. INR360/INR936 in 2QFY25/1QFY26. It reported net profit of INR809m (+22% vs. estimates led by higher other income) vs. a loss of INR307m in 2QFY25.

* The company has commissioned an additional grinding unit with a capacity of 1.35mtpa at Surat and completed the debottlenecking of its cement mills at Jaykaypuram, Sirohi. Consequently, JKLC’s total cement capacity has increased from 16.5mtpa to 18mtpa. 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. We will review our assumptions following the conference call with the management.

Sales volume up 15% YoY; realization/t improves 8% YoY

* Consolidated revenue/EBITDA/adj. PAT stood at INR15.3b/INR2.1b (up 24%/133% YoY and up ~9%/in line vs. estimates). Net profit stood at INR809m vs. a loss of INR307m in 2QFY25. Sales volume increased 15% YoY to 2.8mt (in line). Realization/t was up 8%/3% YoY/QoQ at INR5,388/t (~5% above estimate).

* Opex/t increased 1% YoY (~5% above estimate), led by a ~9% YoY rise in freight cost/t. Variable cost/other expenses per ton declined ~2%/5% YoY. However, staff cost/t increased ~3% YoY. OPM surged 6.4pp YoY to ~14%, and EBITDA/t increased ~103% YoY to INR733 in 2QFY26. Depreciation/ finance costs were up ~4%/13 YoY. Other income was up ~130% YoY.

* In 1HFY26, revenue/EBITDA/Adj. PAT stood at INR32.7b/INR5.2b/INR2.3b (up ~17%/67%/275% YoY). OPM increased 4.7pp YoY to ~16%. Realization/t stood at INR5,305 (up ~4% YoY), while EBITDA/t stood at INR842 (up ~49% YoY). OCF stood at INR352m vs. INR52m in H1FY25. Capex stood at INR252m vs. INR440m. Net cash inflow stood at INR99m vs. net cash outflow at INR388m in 1HFY25.

Highlights from the management commentary

* The share of green power stood at ~46% in 2QFY26 vs. 49% in 1QFY26. The company is implementing a project to increase the TSR share to 16% from 4% at its Sirohi plant in a phased manner.

* The company commissioned an additional 1.35mtpa grinding unit at Surat and completed debottlenecking of its cement mills at Jaykaypuram, Sirohi. Hence, the total cement capacity has increased from 16.5mtpa to 18mtpa.

Valuation and view

JKLC’s operating performance was in line with our estimates. 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 07th Nov’25 (Concall Link).

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