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Performance above est.; EBITDA/t at INR976 (est. INR837)

* JKLC’s 4QFY25 EBITDA was above our estimate due to higher-thanestimated volumes (~3% above estimates) and realization/t (~5% above our estimates). Consol. EBITDA increased 4% YoY to INR3.5b (~20% beat), and EBITDA/t increased ~17% YoY to INR976 (vs. our est. of INR837). OPM contracted 40bp YoY to ~18%. Adj. PAT (after adjusting tax reversal) increased ~23% YoY to INR1.9b (34% above estimates).

* The company is expanding the Surat GU capacity by 1.35mtpa and is further increasing capacity in the East. It is expanding clinker capacity at the Durg plant in Chhattisgarh by 2.3mtpa and is setting up four cement GUs (including three split GUs in the East and Central regions) with an aggregate capacity of 4.6mtpa. Project costs for these capacity expansions, estimated at INR27.3b, will be funded through a mix of debt and internal accruals.

* We have a BUY rating on the stock and will review our assumptions after the conference call with the management.

Sales volume rises 10% YoY; realization/t dips 3% YoY

* Consolidated revenue/EBITDA/Adj PAT stood at INR19b/INR3.5b/1.9b (up 7%/4%/23% YoY and up 7%/20%/34% vs. our estimate). Sales volume increased 10% YoY to 3.6mt. Realization was down 3% YoY/up 7% QoQ at INR5,274/t (+5% vs. our estimate).

* Opex/t was down 3% YoY (owing to a reduction in variable cost declined ~15% YoY) and came ~2% above our estimate, mainly due to higher-thanestimated freight cost and other expenses per tonne. Employee costs/ freight costs/other expenses per tonne increased 8%/15%/7% YoY. OPM contracted 40bp YoY to ~18% and EBITDA/t declined 5% YoY to INR976 in 4QFY25. Depreciation/finance costs were up 13%/down 1% YoY. Other income was down 39% YoY.

* In FY25, JKLC’s revenue/EBITDA/PAT stood at INR61.9b/8.6b/3.1b, which was down ~9%/18%/34% YoY. OPM stood at ~14% (-1.5pp YoY). Sales volume stood at 12.1mt (up ~1% YoY). In FY25, its OCF came in at INR4.9b v/s INR8.1b in FY24. Capex was INR3.8b v/s INR4.0b in FY24. FCF stood at INR1.1b v/s INR4.1b in FY24.

Highlights from the management commentary

* The share of green power stood at ~50% in 4QFY25 vs. 39%/48% in FY24/ 3QFY25. The company is implementing a project to increase the TSR share to 16% from 4% at its Sirohi plant in a phased manner.

* With the government’s continued emphasis on infrastructure development, increased budgetary allocations for housing and road projects, and the softening of interest rates, the outlook for the cement sector remains positive in the coming year.

Valuation and view

* JKLC’s operating performance was above estimates, driven by higher volumes and realization/t. During the conference call, we will seek clarification on the YoY dip in realization and 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 28th May’25 (Concall Link).

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