JK Lakshmi Cement earmarks Rs 1,000 crore for Durg in FY27

JK Lakshmi Cement Limited plans Rs 1,500 crore of capital expenditure in FY27, with almost Rs 1,000 crore earmarked for Durg after Rs 400 crore of project spending in H1 FY27. Management also said it would keep net debt to EBITDA below 3.5 times while carrying out the investment programme.

How much capex is JK Lakshmi Cement planning for FY27?

JK Lakshmi Cement is planning Rs 1,500 crore of total capital expenditure in FY27. Management disclosed the target on its call for the quarter and half year ended September 30, 2026, and said it was planning close to Rs 2,000 crore of spending over the following two years.

The company reported close to Rs 500 crore of total capex in H1 FY27. On the stated Rs 1,500 crore full-year plan, that leaves roughly Rs 1,000 crore for H2 FY27, although management did not provide a quarter-by-quarter spending schedule for the October-March period.

The Rs 1,500 crore figure is management’s planned investment, not completed expenditure. The programme includes Durg construction, land acquisition at Kutch and Nagaur, the Northeast project and normal capex, while the call did not disclose a financing split between internal cash generation and borrowings.

How much will JK Lakshmi Cement spend on Durg?

JK Lakshmi Cement plans to direct almost Rs 1,000 crore of its Rs 1,500 crore FY27 capex budget to Durg. This makes Durg the largest disclosed destination for the year’s spending, accounting for about two-thirds of the total based on management’s stated allocations.

Management clarified that Durg spending was Rs 400 crore in H1 FY27, comprising Rs 200 crore in the first quarter and Rs 200 crore in the second quarter. The FY27 allocation therefore implies about Rs 600 crore of further Durg spending in H2 FY27 if the company meets its near-Rs-1,000 crore project target.

The detailed response also put cumulative Durg expenditure at close to Rs 600 crore to Rs 650 crore by the end of H1 FY27. Management said this included Rs 400 crore in the current half year and Rs 200 crore in the previous year; an earlier call response had cited overall Durg spending of close to Rs 450 crore before this subsequent clarification.

JK Lakshmi Cement’s presentation, as referred to by an analyst on the call, included a 4.6 million-ton Durg expansion in FY28. The supplied excerpt does not state the project’s commissioning date, total project cost or construction-completion percentage, so those measures cannot be assessed from the call.

Where will the remaining FY27 capex go?

JK Lakshmi Cement said the balance of about Rs 500 crore in its FY27 capex plan will go to Kutch and Nagaur land acquisition, the Northeast project and normal capex. Management did not disclose separate allocations for any of those three uses.

The land purchases at Kutch and Nagaur were identified separately from Durg, while normal capex was described alongside the larger development projects. With close to Rs 500 crore spent overall in H1 FY27 and Rs 400 crore spent at Durg, the disclosed H1 figures indicate that about Rs 100 crore of first-half capex was deployed outside Durg.

For the Northeast project, management is targeting commissioning around March 2029 and estimated capex of around Rs 1,800 crore. The company also said it has four mines in the Northeast, while the FY27 allocation does not reveal how much of the approximately Rs 500 crore non-Durg pool will be spent on that project.

Management said the Northeast could eventually supply North Bengal and Bihar, but described this as not immediate and potentially relevant after seven to 10 years. It had not calculated the landed cost of supplying clinker from the Northeast relative to its existing plants when asked on the call.

What leverage limit will JK Lakshmi Cement maintain?

JK Lakshmi Cement said it will ensure net debt to EBITDA does not cross 3.5 times going forward. EBITDA means earnings before interest, tax, depreciation and amortisation, and the ratio compares net debt with that earnings measure.

Management acknowledged that net debt to EBITDA had increased, but did not disclose the current ratio in the supplied call excerpt. The 3.5-times level is a management guardrail rather than a reported loan covenant or a forecast of the company’s actual leverage at the end of FY27.

The capex programme will run alongside an operating recovery management expects in H2 FY27. Cement volume grew 7% in H1 FY27, compared with 5% in Q2, and management said it was confident of matching industry growth over the following six months after monsoon disruption in Gujarat and Chhattisgarh.

Management also reported Q2 fuel cost of Rs 1.82 per 1,000 kilocalories, up from Rs 1.54 per 1,000 kilocalories, and expected around Rs 2 in Q3. It did not directly link fuel costs to capex funding, but higher fuel costs are part of the operating environment during the planned H2 spending acceleration.

How does the FY27 spending pace compare with earlier Durg investment?

JK Lakshmi Cement’s almost Rs 1,000 crore Durg allocation for FY27 is substantially above the Rs 200 crore it said was spent on the project in the previous year. The Rs 400 crore spent in H1 FY27 alone was twice that earlier annual amount, indicating a faster spending pace during the current year.

The comparison also sets a clear H2 execution requirement. Durg needs about Rs 600 crore more in H2 FY27 to reach its almost Rs 1,000 crore allocation, while the overall capex programme needs roughly Rs 1,000 crore after close to Rs 500 crore was spent in H1 FY27.

Management’s plan for close to Rs 2,000 crore over the next two years extends the investment horizon beyond the Rs 1,500 crore FY27 programme. However, the call did not provide annual targets for FY28 and FY29, nor did it state how the Rs 1,800 crore Northeast project cost would be phased across those years.

Conclusion

JK Lakshmi Cement has placed Durg at the centre of its FY27 investment plan, allocating almost Rs 1,000 crore from a Rs 1,500 crore capex budget. The company had already spent Rs 400 crore at Durg and close to Rs 500 crore overall in H1 FY27, while identifying Kutch and Nagaur land, Northeast development and normal capex as the other uses of funds.

The main next measure is the H2 FY27 deployment pace, as the company needs roughly Rs 1,000 crore of overall capex and about Rs 600 crore at Durg to meet its stated FY27 plans. Investors can also watch management’s 3.5-times net-debt-to-EBITDA guardrail and the Northeast project’s target commissioning around March 2029.