JK Lakshmi Cement (500380) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 was marked by subdued demand, significant price pressure, and a sharp drop in sales realization, leading to a 9% YoY volume decline and a substantial decrease in net profit to Rs. 7.54 crores from Rs. 83.03 crores YoY.

• Despite lower volumes, market share was maintained or improved in core geographies, with a strategic focus on profitable markets.

• Cost control measures led to reductions in variable costs (down 11% YoY), overall costs (down 5%), power (down 9%), and fuel (down 22%).

• The company is progressing with a composite scheme of arrangement to merge key subsidiaries, pending regulatory approvals.

Financial highlights

• Consolidated cement sales volume for the quarter was 23.60 lakh tons, clinker 1.33 lakh tons, totaling 24.93 lakh tons; standalone sales volume was 18.66 lakh tons, down from 21.71 lakh tons YoY.

• Consolidated net sales for Q2FY25 were Rs. 1,234.29 crores, down from Rs. 1,574.53 crores YoY; standalone net sales were Rs. 1,141.34 crores, down from Rs. 1,452.62 crores.

• Consolidated PAT for Q2FY25 was a loss of Rs. 19.24 crores, compared to a profit of Rs. 95.87 crores YoY.

• Non-cement revenue for the quarter was INR 126 crore, with RMC contributing INR 66 crore and margins at 5%.

• Freight cost increased sequentially by INR 50 per ton, attributed to changes in clinker sales mix and inflation.

Outlook and guidance

• Management expects to align with industry growth (4-5% for FY25) in the next two quarters, with ambitions to outpace industry growth in FY26 as new capacities ramp up.

• The outlook for the cement sector remains positive, supported by government focus and higher budgetary allocations for infrastructure, housing, and road development.

• Prices have started to improve post-September, with further increases anticipated as demand recovers post-Diwali.

• CapEx guidance: FY25 INR 900 crore (consolidated), FY26 INR 1,000 crore, with major projects in Surat, Durg, and Northeast Assam.