India: JK Cement reports 18% y-o-y growth in cement sales in Q1FY’27

• Capacity expansion remains on track to reach 40 mnt/year by FY’28
• Higher fuel costs expected to increase expenses in Q2FY’27

JK Cement delivered a strong Q1FY’27 performance, with cement sales volumes rising 18% y-o-y to 6.6 million tonnes (mnt), supported by healthy demand, higher market share, and recently commissioned capacities in central India. The company reaffirmed its capacity expansion plans and remained positive on cement demand, while cautioning that higher fuel costs are expected to increase operating expenses in the next quarter.

Capacity expansion remains on track
The company said all ongoing expansion projects are progressing as scheduled.

• 7 mnt/year grey cement project at Jaisalmer, Rajasthan, is under construction and scheduled for commissioning in H1FY’28.
• 2 mnt/year split grinding unit at Bikaner, Rajasthan, is progressing with civil and mechanical works, with commissioning planned for H1FY’28.
• 2 mnt/year split grinding unit at Bathinda, Punjab, has completed land acquisition and major equipment ordering, with commissioning targeted for H1FY’28.
• 0.6 mnt/year wall putty plant at Nathdwara, Rajasthan, is nearing completion and is expected to be commissioned during Q2FY’27.

The cement maker also confirmed that none of its planned expansion projects have been deferred.

Volume growth supports Q1FY’27 performance
Cement sales volumes increased 18% y-o-y to 6.6 mnt, driven by higher dispatches from the Bihar grinding unit and stronger market share in central India. Cement and clinker capacity utilisation stood at 75% and 76%, respectively in Q1, supported by healthy demand and improved production efficiency.

Blended cement contributed 67% of sales, up from 65% in Q4FY’26, improving clinker efficiency and supporting lower production costs. Trade sales accounted for 69% of dispatches during Q1FY’27, compared with 68% in Q4FY’26, reflecting healthy retail demand. Premium products contributed 18% of trade sales, supporting better realisations and value-added sales.

Growth in northern and southern markets remained in line with industry demand, although capacity constraints limited additional sales. The company expects grey cement volumes to reach 22.5-23 mnt in FY’27.

Stable prices, healthy demand support outlook
Cement prices remained broadly stable during Q1FY’27 and are expected to remain firm through the monsoon as higher fuel costs reduce the likelihood of aggressive price cuts. Demand remained healthy across most operating regions, particularly in central India, supported by housing and infrastructure activity.

Net sales realisation (NSR) increased to INR 5,065/t from INR 4,841/t in Q4FY’26, supported by stable pricing and a better product mix.

Higher fuel costs likely to increase expenses in Q2FY’27
The company expects operating costs to increase by around INR 150/t in Q2FY’27, including nearly INR 100/t from higher fuel prices. Stable packing bag costs are expected to partly offset the increase. To improve long-term cost competitiveness, the company continues investing in renewable energy and captive coal blocks, with one coal block expected to commence production by the end of FY’28.

White cement, RMC businesses continue to grow
The white cement business benefited from lower imports from the UAE, supporting domestic sales during the quarter. The ready-mix concrete (RMC) business expanded to 17 plants, generating INR 35-40 crore in quarterly revenue, with plans to increase the network to 50 plants by FY’27 and 100 plants by FY’28.

Outlook
The cement manufacturer expects cement demand to remain supported by housing and infrastructure activity during FY’27. While higher fuel costs are likely to pressure margins in Q2FY’27, ongoing capacity additions, stable pricing and continued operational improvements are expected to support the company’s growth plans.