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Motilal Oswal Report
We interacted with JK Cement Ltd.'s management to gauge their growth plans, industry demand and pricing trends, scope for cost reduction, and the dynamics of the white cement and putty business. The key takeaways are:
JK Cement recently commenced commercial operations at its greenfield integrated plant at Panna, Madhya Pradesh (clinker/grinding capacity of 2.64 million tonnes per annum/ 2 mtpa) and a greenfield grinding unit at Hamirpur, Uttar Pradesh (grinding capacity of 2 mtpa) ahead of its original schedule. Production capacity in gray cement now stands at 18.7 mtpa.
It is increasing its gray cement capacity by 5.5 mtpa at an estimated capex of Rs 11.6 billion. This will include brownfield expansion of 2 mtpa through debottlenecking at four units and will be completed by March 2023.
JK Cement will set up two split greenfield grinding units at Ujjain, Madhya Pradesh and Prayagraj, Uttar Pradesh with an expected commissioning by Q2 FY25.
No major savings in energy cost are expected for JK Cement in Q3 FY23 as it consumed its low-cost inventory and its cost increase was lower versus that of the industry.
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