India: JK Cement’s Panna expansion strengthens FY’27 volume growth prospects

• Expansion to provide additional capacity to cater to demand in central India 
• Company reported 18% growth in grey cement volumes to 5.96 mnt in Q1FY’27

JK Cement is set to benefit from recently commissioned capacity additions, with the Panna Line-2 expansion expected to support volume growth in Central India during FY27. The company’s capacity ramp-up comes amid expectations of continued cement demand growth across its core northern and central markets.

Panna expansion to support volumes
The company commissioned 1 mnt/year of additional grinding capacity at its Panna plant in Madhya Pradesh in January 2026, taking the plant’s grinding capacity to 3 mnt/year. The expansion is expected to provide additional capacity to cater to demand in Central India and support higher grey cement volumes.

The company reported 18% y-o-y growth in grey cement volumes to 5.96 million tonnes in Q1FY27, aided by incremental capacity in Central India and Bihar.

Capacity expansion remains key focus
JK Cement is continuing to expand its manufacturing footprint, with a 7 mnt/year grey cement capacity expansion planned in northern India. The company aims to increase total grey cement capacity from around 32.3 to 40 mnt/year by FY28-end and 50 mnt/year by FY30.

However, the expansion programme will require substantial capital expenditure. JK Cement has budgeted around INR 3,500 crore of capex for FY27, which could keep leverage elevated as new projects progress.

Energy costs remain a watchpoint
Higher fuel and diesel costs could weigh on near-term operating costs. Management expects costs to rise by around Rs 150/tonne (t) sequentially in Q2FY27, although fuel costs are expected to moderate thereafter. Increasing the share of green power and alternative fuels remains a key cost-efficiency initiative.

Outlook
Panna’s incremental capacity, along with Bihar additions, should provide company with additional room to increase volumes in FY27. The pace of capacity utilisation, cement demand, fuel costs and execution of planned expansions will remain key factors for the company’s operating performance.