J.K. Cement Q1 FY27: Strong Volumes, But Costs Took the Edge Off

J.K. Cement began FY27 with strong operating momentum, led by a sharp rise in cement dispatches. In Q1 FY27, standalone revenue from operations rose to INR3,866 crore, up 21% year on year. The growth, however, came with a margin trade-off. Standalone EBITDA declined 5% year on year to INR639 crore, and EBITDA per tonne fell to INR982, down 20% year on year.

The company’s message across the investor presentation and earnings call was consistent. Demand remained supportive, realizations improved versus the previous quarter, and new capacity in Central India helped drive volumes. But cost pressures linked to fuel and diesel, combined with unusually high maintenance, reduced profitability. Management also guided that cost pressures could persist into Q2, with fuel expected to peak in the monsoon quarter.

Volumes led the quarter, with Central India as the growth engine

On volumes, J.K. Cement posted a strong quarter. Grey cement volume in Q1 FY27 (standalone) was 5.96 million tonnes, up 18% year on year. White cement volume was 0.54 million tonnes, up 29% year on year. Combined volumes were 6.01 million tonnes, up 18% year on year.

Management attributed the bulk of the grey volume growth to the ramp-up of recently commissioned capacity in Central India, including the Bihar grinding unit. On the call, the company said it gained market share in Central India and maintained market share in North and South, where it also indicated capacity limitations.

For white cement and putty, management highlighted an external tailwind. Supply from UAE imports was disrupted due to geopolitical issues, creating an opportunity for higher domestic volumes in India during the quarter. At the same time, the company’s overseas white cement operations were negatively impacted by shipping constraints, with management stating that in Q1 the company lost about 50% of normal volume in the UAE region due to restrictions and lack of ship loading.

Pricing improved versus Q4, but costs moved faster

While profitability declined year on year, management indicated that pricing remained stable entering the monsoon season. On the call, management said current prices were broadly flat versus the Q1 average, and it did not expect a meaningful monsoon price drop given elevated input costs.

Operationally, the company reported improved realizations in grey cement versus the March quarter. In the presentation, net sales realization for grey standalone was shown at INR5,065 per tonne versus INR4,841 per tonne in Q4 FY26. Capacity utilisation for Q1 FY27 (grey standalone) was reported at 75% for cement and 76% for clinker.

But the cost environment remained difficult. Fuel and logistics costs were the key moving parts.

The investor presentation showed fuel cost (grey standalone) at 1.53 INR per kcal in Q1 FY27, compared with 1.48 in Q4 FY26. Fuel cost per tonne was INR778 in Q1 FY27 versus INR753 in Q4 FY26. The company linked the increase to pet coke prices, partly offset by fuel mix changes.

Pet coke price trends were also shared. Imported pet coke (6.5% sulphur USA CFR) peaked in April 2026 and then started declining, with the June 2026 level at 135 dollars per tonne.

On logistics, lead distance for grey standalone was 418 km in Q1 FY27, compared with 436 km in Q1 FY26. The company said the year-on-year reduction was due to the commissioning of the Bihar grinding unit. Despite this, logistics cost per tonne increased to INR1,315 in Q1 FY27 from INR1,281 in Q4 FY26, with diesel price increases cited as a factor.

Other expenses also rose meaningfully. In standalone cost metrics, other expenses per tonne increased to INR1,025 in Q1 FY27, compared with INR872 in Q4 FY26, driven mainly by higher maintenance and packaging cost.

Financial summary (Standalone)

Management also quantified the unusual maintenance activity. In Q1 FY27, extra maintenance cost was stated at about INR50 to 60 crore, with a similar, marginally lower level expected in Q2.

Expansion roadmap remains intact: 50 MTPA by FY30

J.K. Cement reiterated its longer-term capacity roadmap. The company highlighted that it is among India’s top five cement manufacturers and is progressing towards 50 MTPA by FY30.

As of March 31, 2026, the company reported grey cement capacity of 32.3 MTPA (including 0.42 MTPA in a subsidiary) and white cement and wall putty capacity of 3.1 MTPA (including 0.60 MTPA in a subsidiary).

The headline growth lever is the 7 MTPA grey cement expansion in North India, with commissioning targeted in H1 FY28:

• Jaisalmer, Rajasthan: 4 MTPA clinker and 3 MTPA cement capacity, project cost INR3,630 crore; expenditure YTD June 2026 was INR1,162 crore.
• Bikaner, Rajasthan: 2 MTPA split grinding unit, project cost INR565 crore; expenditure YTD June 2026 was INR181 crore.
• Bhatinda, Punjab: 2 MTPA split grinding unit, project cost INR610 crore; expenditure YTD June 2026 was INR85 crore.

Management said ordering and engineering are complete for Jaisalmer and Bikaner, and civil and erection work is progressing. For Bhatinda, the company stated that land acquisition was complete and that environmental and consent approvals were expected by September 2026.

Alongside grey cement, the company is expanding value-added products. The Nathdwara wall putty project in Rajasthan is a 6 lakh MT plant with commissioning expected in Q2 FY27. In the earnings call, management linked this expansion to reducing reliance on toll manufacturing and enabling plans for double-digit growth in putty volumes.

Capex guidance was also provided. The investor presentation indicated planned capex of INR5,000 to 6,000 crore over the next two years. In the earnings call, management guided capex of about INR3,500 crore in FY27 and about INR1,200 crore in FY28, excluding any additional next-leg expansion.

Balance sheet and cost outlook: near-term pressure, longer-term levers

The company’s debt profile increased during the quarter, reflecting ongoing capex. As of June 30, 2026, gross debt stood at INR5,551 crore versus INR5,136 crore as of March 31, 2026. Cash was INR1,686 crore versus INR1,765 crore, taking net debt to INR3,864 crore. Net debt to EBITDA was reported at 1.69 times.

On the cost outlook, management’s guidance for Q2 was clear and conservative. It expects overall cost to rise by about INR150 per tonne in Q2 versus Q1, driven by a mix of fuel cost increases and diesel-related impacts. Management indicated that packaging costs should be flat to marginally lower in Q2, while fuel cost per tonne could rise by about INR75 to 100.

Fuel mix was disclosed on the call as 40% pet coke, 45% Indian coal, and the balance alternate fuels. Management noted that the company keeps evolving the fuel mix based on availability and pricing, and it also referenced importing US coal when economical.

A longer-term structural lever is fuel security through captive coal blocks. The investor presentation listed the Mahan coal block in Madhya Pradesh with around 70 MT reserve and the West of Shahdol coal block with around 26 MT reserve, noting that development work at Mahan is expected to start during the financial year. In the call, management said coal from Mahan could start by end of FY28 and that the second block could follow about a year later.

Newer businesses: paints and RMC continue to scale

J.K. Cement also shared updates on two newer verticals.

In paints, the company reported net revenue above INR125 crore in Q1 FY27 and said the segment was EBITDA breakeven during the quarter. Management guided a FY27 revenue target of INR500 to 550 crore for the paints business. It also reiterated that total approved expenditure for paints was limited to INR600 crore, and positioned paints as a strategic adjacency that supports its putty franchise and channel retention.

In ready-mix concrete, the company stated it has 17 RMC plants in operation. Q1 revenue was guided at about INR35 to 40 crore, compared with around INR5 crore in Q4. Management said it plans 50 plants by FY27 and 100 plants by FY28 and expects RMC to reach around INR250 crore of revenue in FY27, with a possibility of touching INR300 crore. It also clarified that RMC is a lower-margin business, typically 4% to 7% EBITDA margins, but strategically important for project access and cement pull-through.

ESG disclosures and recognition

The investor presentation highlighted ESG recognition and quantitative progress against FY30 targets. The company reported an S&P Global CSA ESG score of 76 out of 100 and an NSE Sustainability Ratings Analytics score of 67, stating it was the highest rated cement company in that framework.

On operational ESG KPIs, green power mix was reported at 53.5% as of YTD June 2026, with a FY30 target of 75%. Water positivity was reported at 4.9 times versus a FY30 target of 5.

Takeaways from Q1 FY27

J.K. Cement’s Q1 FY27 performance highlighted a familiar cement cycle pattern. Volumes and realizations improved, helped by capacity ramp-up in Central India and reduced import pressure in the white segment. But profitability was constrained by fuel and diesel inflation and an unusually high maintenance quarter.

The near-term watch items are management’s cost guidance for Q2, fuel price trajectory, and monsoon season operating leverage. The medium-term focus remains execution of the H1 FY28 North India expansion and commissioning of the Nathdwara putty plant in Q2 FY27. On balance, the company is staying on its expansion timetable while acknowledging that margins will remain sensitive to energy costs in the coming quarters.