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JK Cement Limited Q1 FY 2025 Earnings Conference Call Summary
Earnings Highlights • Net Sales: Decreased 11% quarter-on-quarter to ₹2,555 crores; up 1% year-on-year. • EBITDA: Fell 13% to ₹479 crores; rose 19% year-on-year. • Profit Before Tax: Dropped 19% to ₹292 crores. • Profit After Tax: Decreased 14% to ₹203 crores. • Earnings Per Share (EPS): ₹26.2, down from ₹30.5 in the previous quarter.
Operational Updates • Grey Cement Volumes: Grew 6% year-on-year. • Expansion Projects: New grinding unit in Prayagraj; further expansions planned in Bihar and Panna. • Debt Status: Gross debt at ₹4,515 crores; net debt at ₹2,830 crores.
Management Insights • Jaisalmer Expansion: Decision expected by end of next year, contingent on infrastructure readiness. • White Cement Segment: Declining volumes due to aggressive pricing from competitors. • Cost-Saving Targets: Aiming for ₹150 to ₹200 per ton savings over the next few years.
Market and Competitive Landscape • Paint Segment: Projected top line of ₹300 crores; facing pricing pressures in the North market. • Market Capacity: Management confirmed expansion and maintenance of market share. • Raw Material Costs: Stability noted; benefits expected from inventory buildup and decreasing fuel prices.
Financial Projections • CAPEX Guidance: Q1 FY '25 CAPEX at ₹125 crores; overall FY '25 target remains at ₹1,900 crores. • EBITDA Loss in Paint Segment: Projected at ₹40 crores for FY '25. • Pricing Pressures: Potential price increase anticipated in Q3 after a challenging Q2.
Future Outlook • Clinker Capacity: Expected to exceed 18 million tons for a 30 MTPA grinding unit. • Green Power Target: Aiming for 75% by FY '30, potentially two years earlier. • Operational Efficiency: Confidence in managing net debt to EBITDA ratios despite rising costs.
Conclusion • Management expressed optimism about maintaining operational efficiency and market positioning amidst fluctuating prices and costs, inviting further questions via email.
JK Cement Limited Q4 FY 2024 Conference Call Summary
Financial Highlights • Q4 FY 2024 Results: • Net sales increased by 6% to Rs. 2,856 crores. • EBITDA declined by 10% to Rs. 548 crores. • Fiscal Year Results: • Net sales rose 16% to Rs. 10,563 crores. • EBITDA increased by 52% to Rs. 2,005 crores. • Profit after tax up 65% to Rs. 831 crores.
Growth and Expansion • Significant growth in gray cement volumes. • Ongoing expansion projects: • New grinding unit. • 6 million ton expansion plan. • Dividend of Rs. 20 announced.
Management Insights • Confidence in achieving 10% growth despite subdued demand. • Potential cost reductions of Rs. 150-200 per ton. • Updates on Toshali Cement acquisition: • Requires Rs. 40 crores for modernization. • Expected annual output of 3-4 lakh tons.
Capital Expenditure (CAPEX) • FY25 CAPEX estimated at Rs. 1,900 crores. • FY26 CAPEX estimated at Rs. 1,800 crores. • Total expansion cost remains at Rs. 2,850 crores.
Operational Updates • Panna clinker and grinding unit expected to start by Q2/Q3 FY26. • Bihar unit to come online simultaneously. • Fuel mix: 60% pet coke, 40% imported coal and alternate fuels.
Market Position and Future Plans • Market share: 45-48% in white cement, 22% in wall putty. • Exploring growth options in Jaisalmer and Karnataka. • Continuous growth focus with no strict timelines for new plants.
Branding and Marketing • Increased branding expenses due to dealer engagement and IT investments. • Branding costs expected to remain significant.
Paint Business Performance • Revenue dip noted, but on track for FY25 target of Rs. 300 crores. • Long-term TSR targets aiming for 25% by FY30.
Additional Insights • Clinker ratio for FY24 confirmed at 0.66. • Blended cement ratio stands at 67%. • Emphasis on achieving 75% green power at facilities.
Conclusion • The call concluded with management expressing gratitude to participants and addressing various queries regarding financial performance, expansion plans, and market strategies.
J.K. Cement Limited Conference Call Summary (January 23, 2024)
Financial Performance • Net Sales: Increased by 9% quarter-over-quarter to INR 2,690 crores; 18% year-over-year growth. • EBITDA: Rose 36% to INR 608 crores; significant 147% increase year-over-year. • Profit Before Tax: Increased by 69% from the previous quarter and 363% year-over-year.
Expansion Plans • New Projects: 6 million ton expansion in Central India with a total cost of INR 2,850 crores. • Capacity Increase: Overall grey cement capacity to reach 30 million tons by FY '26. • Production Goals: Expected to close FY '24 with 16.5 million tons; incremental increases of at least 2 million tons in FY25 and FY26.
Business Updates • White Cement: 5% year-on-year growth; profitability impacted by competition in the putty segment. • Paint Business: Projected turnover of over INR 150 crores; expected to reach INR 250-300 crores in FY25. • Gross Debt: Current gross debt at INR 4,600 crores, projected to peak at INR 5,600 crores by FY26.
Operational Insights • Cost Savings: Anticipated savings of INR 30-40 per ton in Q4 due to reduced petcoke prices. • Waste Heat Recovery System (WHRS): New plant at Muddapur expected to add 18 megawatts; aiming for 50-60 megawatts annual increase. • Employee Costs: Increased due to variable pay linked to profit targets.
Market Outlook • Cement Demand: Expected growth rate of 7-9%; market absorption of incremental capacity anticipated. • Freight Costs: Likely to remain stable in the near term; increased costs due to busy seasons noted.
Future Projections • Green Energy Goals: Targeting 60% by FY'26 and 75% by 2030. • Cement Clinker Ratio: Expected to be between 0.62 to 0.64 by FY'26. • Price Increases: Optimism about potential price increases in North and Central regions, dependent on market conditions.
JK Cement Limited Q2 and H1 FY24 Conference Call Summary
Financial Performance • Net Sales: Decreased by 3% to INR 2,476 crores. • Revenue from Operations: Declined by 2% to INR 2,571 crores. • EBITDA: Increased by 11% to INR 447 crores; margins improved to 18%. • Profit After Tax: Rose to INR 179 crores from INR 126 crores. • Gray Cement Production: Increased by 22%.
Expansion Plans • Projects: • 1.5 million ton capacity project in Ujjain. • 2 million ton greenfield plant in Prayagraj.
Operational Insights • Panna Unit Utilization: 75% with profitability aligning as ramp-up continues. • Cost Management: Anticipated savings as clinker production increases and alternative fuel resources are utilized. • Putty Business: Strong volume growth but slight margin dip due to competitive pressures.
Capacity and Costs • Clinker Capacity: Projected to reach around 15 million tons, with potential to increase to 22 million tons. • Pricing Trends: 3-4% increase in key regions; coal costs expected to decrease slightly in Q3. • Freight Costs: Increased due to the absence of busy season surcharge in Q3.
Market Conditions • Rail Mix: Decreased from 14% in Q1 to 11% in Q2 due to seasonal factors. • Gray Cement EBITDA: Expected to rise to around INR 1,000 per ton in Q3. • Paint Business: Projected loss of INR 20 crores for the year; breakeven hoped by next year.
Demand Trends • Stable Demand: Slight dip expected in November due to festivals and elections. • UAE Operations: Improved market conditions; no immediate concerns about import duties.
Subsidies and Costs • Incentives: Total of INR 69 crores for Q2. • Fuel Costs: Reduced from INR 2.4 to INR 1.94 per ton. • Freight Cost Reduction: 15% off-season discount from railways, impacting costs by INR 7-8 crores.
Future Plans • Toshali Cement Expansion: Contingent on obtaining a mining lease. • Paint Revenue: INR 21 crores booked in the stand-alone entity; merger of JK Acro with JK Maxx planned post-final payment.
Maintenance Costs • One-off Maintenance Expenditure: INR 30-35 crores in Q2; INR 15-20 crores identified as one-off expense.
Conclusion • The call concluded with thanks and well wishes for Diwali.
JK Cement Limited Q4 FY23 Conference Call Summary
Financial Performance • Q4 FY23 Results: • Net sales increased by 4% to Rs. 2,332 crores. • EBITDA rose by 39% to Rs. 372 crores. • Fiscal Year Performance: • Net sales up 17% to Rs. 8,776 crores. • EBITDA decreased due to high costs.
Capacity Expansion • Expanded capacity by 6 million tons, reaching 20 million tons. • Plans for further expansions with a target of 15% volume growth for the upcoming year.
Capital Expenditure (CAPEX) Plans • Total expected CAPEX for the current fiscal year: Rs. 1,200 to Rs. 1,400 crores. • Specific allocations: Rs. 300 crores for Ujjain, Rs. 125-150 crores for Prayagraj. • Anticipated additional CAPEX of Rs. 700 to Rs. 800 crores for the next fiscal year.
Cost Management • Improvement in realizations due to favorable sales mix and increased trade sales. • Expected reduction in fuel costs by Rs. 250 to Rs. 300 over the next few quarters.
Merger and Financial Discrepancies • Ongoing merger of Jaykaycem (Central) into standalone entity expected to complete by Q2. • Rs. 12 crore loss in consolidated results attributed to one-off costs from a paint business acquisition.
Market Insights • Estimated subsidy benefits of Rs. 200 per ton for Central India starting Q2. • Expected improvement in grey cement margins from 15.3% to around 17% for the year.
Paint Business Projections • Projected sales: Rs. 150-180 crores for the current fiscal, Rs. 270-300 crores for the next. • Estimated EBITDA losses around Rs. 50 crores for the year.
Pricing and Production Insights • Flat pricing trends with potential increases post-monsoon. • Ongoing testing of Panna WHRS project, expected operational normalization by June.
Working Capital and Logistics • Significant year-on-year reduction in working capital by approximately Rs. 1,500 crores. • Logistics benefits from lower lead distance for Panna plant.
Future Expansion and Debt Management • Jaisalmer limestone lease acquisition underway, expected completion within the fiscal year. • Target to maintain net debt to EBITDA below 2, with potential margin improvements in grey cement.
Competitive Landscape • Aiming for a market share of 8% to 12% in the central region. • Branding efforts have improved trade share and pricing, positioning against market leaders.
Conclusion • The call concluded with management expressing optimism about future growth and efficiency improvements.
JK Cement Limited Q3 FY2023 Conference Call Summary
Financial Results • Revenue: Increased by 18% to ₹2,288 crores. • EBITDA: Decreased by 29% to ₹267 crores. • Profit Before Tax: Down 50% to ₹129 crores. • Profit After Tax: Fell by 42% to ₹97 crores.
Strategic Developments • Expansion: Successful commissioning of a 4 million ton Greenfield expansion. • Acquisition: Acquired a 60% stake in Acro Paints for diversification.
Market Challenges • Pricing Pressures: Difficulty in sustaining price increases in the cement market, especially in North and South regions despite good demand.
Operational Metrics • Rail Movement: Reported at 19% with a lead distance of 470 kilometers. • Fuel Costs: Increased by ₹400 per ton; expected reduction of ₹0.20 per Kcal in the current quarter. • Fuel Mix: Pet coke usage increased to 55% by volume.
Capital Expenditure • Planned Capex: ₹1,900 crores for 2023; ₹1,600 crores spent so far. • Remaining Capex: ₹200-250 crores expected for the last quarter.
Panna Plant Updates • Capacity Utilization: Confidence in reaching 50% capacity utilization. • Operational Costs: Initial costs impacting EBITDA but expected to normalize.
Future Projections • Lead Distance: Expected decrease by 8-10% post-Panna plant commissioning. • White Cement Business: Competitive, especially in the putty segment.
Financial Outlook • Short-term Borrowings: Estimated between ₹350-400 crores; consolidated figures over ₹500 crores. • Brand Positioning: Initial discounts in the central region, maintaining premium positioning.
Merger Progress • Panna Subsidiary Merger: Progressing through NCLT; actual effects may take time due to state confirmations.
Paint Business Insights • Capex for Paints: Total of approximately ₹275 crores, including funds for Acro acquisition. • Market Competition: Increasing competition in the putty market; need to maintain market share.
Conclusion • Future Revenue: Projected significant increase for FY2024 with reduced losses from Acro Paints. • Management's Closing Remarks: Thanks to participants and optimism about stabilizing operations.