Incorporated in 1938, JK Lakshmi Cement (JKLC), part of the JK Group, is a leading manufacturer of cement and cementitious products, including RMC and AAC blocks. The company has expanded its cement capacity to 16.5 MTPA and clinker capacity to 10.0 MTPA as of November 30, 2024.
JKLC operates manufacturing facilities across Rajasthan, Chhattisgarh, Gujarat, Haryana, and Odisha, with integrated units in Sirohi, Udaipur, and Durg, and grinding units in Jhajjar, Cuttack, Kalol, and Surat. The company has a total captive power capacity of 226 MW, including thermal (74 MW), waste heat recovery (45 MW), solar (103 MW), and a 4 MW wind power agreement.
Cement Capacity & Manufacturing Plants
- JK Lakshmi Cement has a total cement capacity of 16.5 MTPA, distributed as follows:
- North India: 8.3 MTPA
- East India: 3.5 MTPA
- UCWL: 4.7 MTPA
- Current capacity utilization is 57%, expected to rise to 65% in FY26, while overall industry utilization stands at 78%.
- The company has 30 manufacturing plants and a presence in over 100 countries.
Peers’ Capacity
- Ambuja Cements (Adani Group): 89 MTPA with 22 integrated plants and 21 grinding units.
- Birla Corporation: 20 MTPA with 10 manufacturing units across 8 locations and capacity utilization above 60%.
Capital Expenditure (CAPEX) Plans
- JK Lakshmi Cement: Invested Rs 250 crore in the last nine months, with an additional Rs 100 crore planned for Q4 FY25. The company aims for a CAPEX of Rs 1,000 crore in FY26 and Rs 1,500 crore in FY27.
- Birla Corporation: Allocated Rs 500 crore for FY25, with Rs 300 crore already spent. The Kundanganj expansion is set for Q1 FY26 completion, targeting a 25 MTPA capacity by FY27.
- Adani Cement invested Rs 14,700 crore in H1 FY25, including Rs 12,350 crore in organic and inorganic growth. Plans to expand capacity to 140 MTPA by FY28.
Future Plans:
- JK Lakshmi capacity expansion to 30 MTPA by FY30 from 16.5 MTPA
- Adani group capacity expansion to 140 MTPA by FY28 from 89 MTPA
- Birla Corporation capacity expansion to 30 MTPA by FY30 from 20 MTPA
Key Financials: (Q3 FY25)
JK Lakshmi Cement posted revenue of Rs 1,497 crore in Q3 FY25, down from Rs 1,703 crore in the same quarter last year. Operating margins declined to 13% from 18%, while net profit fell sharply to Rs 60 crore from Rs 150 crore. The management acknowledged potential regional imbalances in demand and supply, which have impacted performance.
Management Guidance:
- Industry demand growth expected at 4-5% in FY25, accelerating to 6-7% in FY26.
- Volume growth supported by infrastructure development and economic recovery.
- Focus on cost optimization and logistics efficiency to reduce distribution expenses.
SWOT Analysis:
JK Lakshmi Cement
- Strengths: Strong regional presence in North, West, and East India, operational efficiency initiatives.
- Weaknesses: Smaller scale compared to industry leaders, lower pricing power.
Birla Corporation
- Strengths: Market leader, extensive capacity, strong operational efficiency.
- Weaknesses: High CAPEX burden, diversification concerns (wires and cables sector).
Adani Group
- Strengths: Strong financial backing, pan-India presence.
- Weaknesses: Integration challenges post-Ambuja-Holcim takeover, margin pressures due to competitive pricing.
Peer Comparison:
| Metric | JK Lakshmi Cement (JKLC) | Ambuja Cement | UltraTech Cement |
| Revenue (Rs Cr) | 6,857 | 34,326 | 71,525 |
| Market Cap (Rs Cr) | 8,462 | 122,060 | 301,377 |
| PE ratio | 31.02 | 29.27 | 48.06 |
| ROE (%) | 10.98% | 5.91% | 10.68% |
| ROCE (%) | 12.55% | 10.06% | 12.37% |
| Debt-to-Equity | 0.7 | 0.02 | 0.28 |
Conclusion:
JK Lakshmi Cement, despite its strong regional presence and ongoing capacity expansion, faces a significant challenge competing against industry giants like Adani and Birla. While JKLC’s expansion to 30 MTPA by FY30 is ambitious, its smaller scale, weaker pricing power, and lower capacity utilization (compared to peers) could impact its competitive edge. Adani Cement’s rapid expansion to 140 MTPA by FY28 and Birla’s steady growth to 30 MTPA by FY30 place immense pressure on mid-tier players like JKLC.
Financially, JKLC’s recent decline in revenue and net profit raises concerns, especially given the regional demand-supply imbalances. However, strong management guidance, infrastructure-led demand growth, and cost optimization efforts provide a positive long-term outlook. To remain competitive, JKLC must accelerate capacity utilization, strengthen distribution networks, and maintain cost leadership. While it may not challenge the industry leaders immediately, a strategic focus on efficiency, brand positioning, and market penetration could help JKLC hold its ground in the evolving cement landscape.
Written by Shashi Kumar
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