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Informist, Saturday, Nov. 1, 2025

By Akshat Saksena

MUMBAI - JK Cement Ltd.'s bottom line for the September quarter is expected to surge over four times from the year-ago due to a low base, according to brokerages. The net profit had taken a hit in the year-ago quarter as economic activity had slowed down due to the general elections. The cement maker's top line for the quarter is seen rising in low teens on robust volumes and better pricing.

The Haryana-based company is expected to post a net profit of INR 2.06 billion in the September quarter, based on the average of estimates from seven brokerages. The highest estimate for the company's September quarter net profit is INR 2.30 billion by Systematix Shares and Stocks (India) Ltd. and the lowest estimate is INR 1.46 billion by Nuvama Wealth Management Ltd.

The cement maker is expected to report net sales of INR 26.98 billion in the September quarter, up nearly 13% on year, as per the consensus estimates. The highest estimate for the company's net sales is INR 28.07 billion by Emkay Global Financial Services Ltd. while the lowest estimate is INR 24.97 billion by Nuvama.

Sequentially, the top line and bottom line of the company are expected to fall 14% and 39%, respectively. This is mainly due to an extended monsoon and as customers delayed purchases to avail the benefit of the lower goods and services tax, according to brokerages.

JK Cement's volumes for the September quarter are estimated to rise over 11% on year but fall over 13% on quarter to 4.67 million tonnes, based on an average of four estimates. The expected on-year rise in the company's volumes is on a low base due to elections last year, which is traditionally known to slow down government expenditure and impacts cement companies, according to brokerages.

The company's grey cement volumes, which accounted for over 90% of the company's overall volumes in the June quarter, are expected to rise 7-12%, according to three brokerages, the lower estimate of which is by Nuvama while the higher estimate is by ICICI Securities and Emkay Global. The grey cement volumes of the company were 3.8 million tonnes in the year-ago quarter and nearly 5 million tonnes in the previous quarter.

Grey Cement is highly versatile and can be used for almost every construction application, while the white cement provides a bright, clean, and smooth finish to the structures, ideal for decorative and high-end applications. Grey cement is an easily accessible and a more affordable type of cement compared to white cement. Due to its high-end applications, white cement is sold at a higher premium, leading to higher margins which drives profitability.

The cement manufacturer's white cement volumes are expected to rise 5-8% in the September quarter from a volume of 400,000 tonnes in the year-ago quarter, according to two brokerages. The higher estimate is by ICICI Securities and the lower estimate is by Emkay Global. The company had reported white cement volumes of 420,000 tonnes in the June quarter.

The company's grey cement realisation is expected to grow 4.4% on year to INR 4,913 per tonne in the September quarter, according to Emkay Global. Despite the prolonged monsoon and goods and services tax rate cut affecting demand in the reporting quarter, the company's grey cement realisation is expected to decline only 0.5-1.0% on quarter from INR 4,938 per tonne in the June quarter, according to three brokerages. Emkay Global estimates the 0.5% decline and ICICI Securities and Nuvama Wealth estimate 1.0% fall in realisation. The company's net sales realisation for grey cement in the September quarter last year was INR 4,708 per tonne.

The company is expected to post an earnings before interest, tax, depreciation, and amortisation of INR 4.74 billion in the September quarter, up nearly 74% on year but down nearly 30% on quarter, based on an average of six estimates. The highest estimate for the company's EBITDA is INR 5.3 billion by Systematix and the lowest estimate is INR 4.17 billion by Nuvama.

The EBITDA of cement companies such as JK Cement is expected to be impacted sequentially by an industry-wide operating deleverage for the reporting quarter due to a sequential decline in volumes and realisation along with a rise in operating expenditure, according to brokerages. Cement companies schedule maintenance shutdown of their manufacturing plants during the September quarter when demand is low due to the monsoon season and this leads to a rise in their operating costs. The operating deleverage of cement companies is expected to be cushioned by stable power and fuel costs, according to brokerages.

The company will report its Jul-Sept earnings on Saturday. The cement manufacturer has a consolidated capacity of 25.26 million tonnes of white cement and 3.05 million tonnes of grey cement, as of Jun. 30. The company's white cement is sold in over 38 countries. 

On Friday, shares of JK Cement ended marginally lower at INR 6,231 on the National Stock Exchange. The stock has fallen nearly 3% since the company announced its earnings for the June quarter on Jul. 19.

Of the 16 research reports on the stock available with Informist, 11 have a "buy" rating, four have a "hold" rating, and one has a "sell" rating. The average target price for the "buy" recommendation is INR 6,803, which has an upside of 7% from the current price.

The following are the Jul-Sept earnings estimates for JK Cement from seven brokerages in descending order of the estimate of net profit in INR million:

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Edited by Tanima Banerjee

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