J K Cements Q2 FY27 Earnings Call: Targets 50 Mn Tonne Capacity by FY30, Flags Higher Fuel Costs in H2 (JKCEMENT)

J K Cements Ltd held its Q2 FY27 earnings call on October 24, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Top Line, Compressed Margins

• Consolidated net sales of Rs.3,561 Cr, +21% YoY (vs Rs.2,932 Cr) but down 9% QoQ; H1 FY 2026-2027 net sales up 21% at Rs.7,457 Cr, driven primarily by gray cement volume growth.
• Standalone net sales of Rs.3,516 Cr, +28% YoY (vs Rs.2,754 Cr); H1 FY 2026-2027 standalone sales Rs.7,301 Cr, +25%. CFO clarified he had initially cited consolidated figures.
• Standalone EBITDA of Rs.500 Cr in Q2 (vs Rs.440 Cr YoY, Rs.639 Cr QoQ); H1 FY 2026-2027 EBITDA up only 2% at Rs.1,138 Cr — cost increases outpaced realizations, per the CFO, and the decline is not on account of fixed costs.
• H1 gray cement volumes +19.38% to 11.3 mn tons (vs 9.49 mn tons); white cement volumes +19% at 10.32 lakh tons (vs 8.62 lakh tons).
• Balance sheet as of 30 Sep 2026: gross debt Rs.6,255 Cr, cash Rs.1,684 Cr, net debt Rs.4,571 Cr (vs Rs.3,370 Cr); net debt/equity 0.63, net debt/EBITDA 1.95.

Central India Expansion Powers Outperformance

• Q2 volume growth stood out vs peers — management attributed it primarily to the 6 mn ton Central India expansion completed in March FY 2025-2026, with other markets contributing "not to that extent" (Ajay Kumar Saraogi).
• FY 2026-2027 gray volume guidance of 23 mn tons plus reaffirmed; management conceded 24 mn tons is possible if no disruptions materialize, but explicitly declined to commit to 24 mn tons despite the analyst's case citing 20% growth and 95% clinker utilization.
• White cement volume guidance at risk: 1H FY 2026-2027 consolidated white cement volume grew 4.9% vs the earlier FY 2026-2027 guidance of 8-10% — a shortfall is possible as Fujairah cannot export beyond the GCC and higher India output only replaces Fujairah's feed into India.
• Standalone white cement volumes grew ~13-14% YoY in Q2, aided by volumes earlier serviced from Fujairah (FY 2025-2026) now being serviced from India, plus market growth in white cement and putty.
• Market share "at par with the market" in Q2 — share maintained in the North, gained in Central India; management aims to secure good North market share in FY 2027-2028 with the "big expansion in the North" coming up.
• Premium push spans all markets and is tied to the trade channel, supporting profitability; premium products fetch ~Rs.150 average extra profit — management cautioned the pace must be maintained or the company risks losing trade market share.
• Q3 FY 2026-2027 headwinds flagged: Diwali will affect some volumes, and construction restrictions are already imposed in New Delhi due to pollution; UP elections are not expected before March (within FY 2026-2027), though earlier polls could disrupt volumes.

Fuel Inflation Meets Partial Price Pass-Through

• Rs.20/bag price increase achieved across trade and non-trade combined (mid-September to mid-October, FY 2026-2027), but a remaining gap of Rs.10-15/bag is still required to fully offset cost increases; an additional hike could come after Diwali (Q3 FY 2026-2027).
• Fuel cost guidance raised: power and fuel costs should increase by Rs.80-100 in each of Q3 and Q4 FY 2026-2027; cost per kcal may rise toward Rs.2 if spot rates persist (Q2 FY 2026-2027 was ~Rs.1.71/kcal; pet coke spot past $185-190, domestic coal premiums nearly doubled).
• Q2 fuel cost of Rs.1.75/Kcal was 15-20% lower than peers, helped by a blend change after Panna line 2 startup — pet coke reduced to 30-35%, Indian coal at 55% of the mix; fuel cost will "definitely be above Rs.2/Kcal" in Q3 FY 2026-2027, with partial impact in Q3 and full impact in Q4 FY 2026-2027.
• CC ratio of 1.5 in Q2 FY 2026-2027; fuel mix was 55% Indian coal, 13% alternate fuels, balance PAT coal.
• Packaging costs have peaked per the CFO, with no further increase expected — but rupee depreciation is flagged as a direct cost risk, and packing costs that had started declining have risen again.
• CFO rejected the analyst's ~Rs.500/tonne gray cement EBITDA estimate for H1 FY 2026-2027, correcting the incentive assumption to ~Rs.80/tonne (not Rs.120-150) and noting the company has "never had" such a level; he declined to share business-wise profit numbers.
• White cement realization rose ~7.5% QoQ in Q2, reflecting price hikes implemented at end of Q1 FY 2026-2027; management does not expect further white cement price increases as customers resist beyond a certain barrier.

50 Million Tonne Journey Funded Through a Leverage Peak

• 50 mn tonne capacity target by FY30 (FY 2029-2030) per the company presentation guideline; management cited the presentation's "50 million tonne" capacity plan in tying the leverage peak to it.
• Capex of Rs.3,500 Cr in FY 2026-2027, then ~Rs.2,500 Cr per year from FY 2027-2028 onwards for brownfield expansions toward the FY30 target.
• Leverage may breach ~2.25x-2.35x debt/EBITDA, peaking mostly at end of FY 2026-2027 on greenfield investment; from FY 2028-2029 onwards, management expects to return toward net debt/EBITDA well within 1.5x over 2-3 years.
• Net debt could peak closer to Rs.6,000 Cr (vs Rs.4,571 Cr now), a level the CFO tied to the 50 mn tonne capacity plan (period unspecified).
• Jaisalmer integrated plant on schedule for H1 FY 2027-2028 commissioning; Bikaner grinding stations also targeted in H1 FY 2027-2028; management said Jaisalmer capacity should not dilute profits as it unlocks currently unserved segments and markets.
• Bhatinda (Punjab): EC and CTE approvals not yet in hand — formal letters expected within October 2026 (Q3 FY 2026-2027), a slight slippage vs the earlier timeline; commissioning targeted within September 2027 (H1 FY 2027-2028).
• Mahan coal block targeted operative in the first half of FY 2028-2029, with all approvals received and site work commenced; the second block's definite schedule is expected in another 6-8 months (by roughly Q1 FY 2027-2028). Management expects captive-mine coal cost within Rs.1.25 in FY 2028-2029 (unit not specified in the call).

Paint Nears Break-Even; RMC Scaling Toward 50 Plants

• Paint revenue of Rs.116 Cr in Q2 FY 2026-2027 (per Prashant Seth); H1 FY 2026-2027 paint revenue ~Rs.250 Cr against the maintained FY 2026-2027 guidance of Rs.500-550 Cr.
• Paint EBITDA loss of Rs.2 Cr in Q2 — management targets break-even/positive EBITDA for full FY 2026-2027; for FY 2027-2028, an initial 5% EBITDA margin target with 3-5% guided as achievable (analyst framed against Rs.650-700 Cr revenue), and profitability should increase 2-3% YoY starting FY 2027-2028.
• Board approved (24 Oct 2026) JK Max's 75,000 KL paint plant at Rs.130 Cr, within the Rs.600 Cr sanctioned limit — with this, the total outlay against the sanction is fully met; no further investment requirement foreseen, with future needs funded by the paint business itself.
• Paint margins targeted at 35-38% (period unspecified), working up from levels below competitor margins of 40%+; advertisement spend under the "Max" brand is apportioned across paint, putty, and partially white cement so each business bears its fair share.
• RMC revenue of Rs.60 Cr in Q2, with Q4 FY 2026-2027 revenue possibly touching Rs.100 Cr; 23 RMC plants operational as of Q2, targeting 50 plants by March 2027 (end of FY 2026-2027) — the business is at a developing stage with no EBITDA currently, and each plant takes ~6 months to break even under the tolling model.
• 0.6 mn ton wall putty plant commissioned at Nathdwara in H1 FY 2026-2027, already at ~90% capacity utilization; total white cement and putty capacity now 3.65 MTPA (3.05 MTPA India + 0.6 MTPA Fujairah, UAE).
• Post-FY 2027-2028 brownfield expansion of 11 MTPA across Mudapur and Panna, with a management-indicated split of ~5-6 mn tons at each location.

Guided Trajectory With Seasonal and Cost Caveats

• White cement seasonality: peak volumes expected in October (Q3 FY 2026-2027), with a sharp dip in November as festivities make it a lean month; no significant quarter-on-quarter variation expected overall.
• Drought impact deemed marginal: management is not factoring the rain-deficiency impact into its FY 2026-2027 demand outlook, as regions served by the south plant contribute only ~15% of total volumes; Maharashtra/Karnataka are mostly sold out with no significant impact foreseen.
• EBITDA/tonne ranking: management expects JK Cement to remain among the top 3-4 players on EBITDA per tonne (FY 2026-2027 onward), noting results declared so far already place it in that group.
• Bihar plant at ~50% utilization roughly 8 months after commissioning — a ramp-up still pending; no one-off maintenance costs were incurred in Q2 FY 2026-2027.
• Clinker utilization at 95% vs cement utilization at 67-70% in Q2 (per the presentation cited by the analyst); management noted the current clinker surplus reflects seasonally lower Q2 volumes and normal inventory levels will continue from Q3 FY 2026-2027 onwards.
• Geopolitical and currency risks flagged: the continuing geopolitical situation and elevated packing/PP costs persist; any renewed rupee weakening would have a direct cost impact.