J K Cement Ltd
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Q1-2026 Earnings Call
AI Summary
Earnings Call on Jul 21, 2025
Strong Sales Growth: Net sales rose 19% year-on-year to INR 3,028 crores, though declined 6% sequentially.
EBITDA Surge: EBITDA was INR 674 crores, up 41% year-on-year but down 9% quarter-on-quarter; EBITDA margin improved to 22.3% from 18.7% last year.
Capacity Expansion: Grey cement capacity now at 25.6 million tonnes, with a 6 million tonne expansion on track to complete by year-end.
Volume Guidance Maintained: Full-year sales volume guidance maintained at 20 million tonnes.
Cost Savings & Green Power: Company targets INR 40–50 per tonne cost savings this year and aims for 60% green power share by FY '26.
Paints Segment Loss: Paints business reported INR 86 crores turnover with INR 10 crores EBITDA loss this quarter.
Saifco Acquisition: Saifco acquisition completed; company sees opportunity to upgrade and expand capacity.
Pricing Steady: Cement prices largely flat, with some weakness in North and Central offset by stronger realization in South.
JK Cement posted 19% year-on-year net sales growth driven primarily by a 15% rise in Grey Cement volumes, with Central India leading at over 50% growth. South also saw good growth, while North lagged. Full-year volume guidance remains at 20 million tonnes, with management confident in strong market share gains in Central and anticipated volume seeding in Bihar ahead of new grinding units.
EBITDA grew 41% year-on-year to INR 674 crores, with margin improving to 22.3% from 18.7% last year. However, both EBITDA and margins slightly declined sequentially. White Cement margins dropped sequentially but have now stabilized in the 15–20% range. Management remains focused on cost savings and expects this to support profitability, especially as green power and operational efficiencies ramp up.
The company completed debottlenecking at Ujjain, bringing Grey Cement capacity to 25.6 million tonnes. Ongoing expansions, including a 6 million tonne greenfield and brownfield project, are on track for year-end completion. Plans for further projects in regions like Jaisalmer, Odisha, and Karnataka are under evaluation, with a strategic focus on adding a new project each year to reach the 50 million tonne target by 2030. FY '26 capex is guided at INR 2,000 crores.
JK Cement received INR 85 crores in incentives this quarter, mainly from newer plants and specific lines like Nimbahera Line 3. Some subsidies, such as for Aligarh, are nearing their end, while others for newer units will continue for several more years. Management expects annual incentives to be around INR 300 crores for the next 3–5 years as expansions come online.
Cement prices remained mostly flat this quarter. The South region saw improvement in realization, offsetting marginal pricing pressure in North and Central. Management noted that the non-trade segment has grown in importance, with the price gap to trade segment fluctuating between INR 20–25 per bag but sometimes higher depending on market conditions.
Paints business reported INR 86 crores in turnover with a gross margin of about 30% but an EBITDA loss of INR 10 crores this quarter. Cumulative investment in paints is INR 450 crores, with a plan to reach INR 600 crores by FY '27. Revenue targets for paints remain INR 400–450 crores for FY '26 and INR 600 crores for FY '27, aiming for EBITDA breakeven by FY '27.
Gross debt at the end of June was INR 5,203 crores, with net debt at INR 2,796 crores. Net debt to EBITDA remains at a comfortable 1.29, and management aims to keep this ratio below 2 even as concurrent projects are taken up. Cash reserves stood at INR 2,407 crores. The company is comfortable managing debt to support its expansion plans.
Management reiterated a target of INR 40–50 per tonne in cost savings for FY '26, as part of a broader INR 150–200 per tonne goal over the next 2–3 years. Green power now accounts for 52% of the company’s energy mix, with a target of 60% by the end of FY '26 and 75% by 2030. Increased green power usage is seen as a key lever for cost reduction.
Ladies and gentlemen, good morning, and welcome to the J.K. Cement Earnings Conference Call for the quarter ended 30th June 2025, hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I will now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Pvt. Ltd. for opening remarks. Thank you, and over to you.
Thank you, Ryan. Good morning, everyone. On behalf of PhillipCapital (India) Pvt. Ltd., we welcome you to the Q1 FY '26 call of J.K. Cement Limited. On the call, we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and Chief Finance Officer; and Mr. Prashant Seth, President, Business Information and Investor Relations.
I would like to mention on behalf of J.K. Cement Limited and its management that certain statements that may be made or discussed on today's conference call may be forward-looking statements related to future developments and statements which are based on current management expectations. These statements are subject to a number of risks, uncertainties and other important factors, which may cause actual developments and results to differ materially from the statements made.
J.K. Cement Limited and the management of the company assumes no obligation to publicly alter or update these forward-looking statements, whether as a result of new information or future events or otherwise.
I will now hand over the floor to the management of J.K. Cement for their opening remarks, which will be followed by interactive Q&A.
Thank you, and over to Saraogi sir.
Thank you, Vaibhav. Good morning, and welcome to Q1 call. So the Board of Directors met on 19th of July to review the performance of the company for the quarter ended 30th June 2025.
And the major highlights are that the net sales grew about 19% year-on-year at INR 3,028 crores and whereas it degrew by about 6% as compared to the previous quarter. The EBITDA during this quarter was INR 674 crores, an increase of 41% year-on-year. However, a dip of 9% over previous quarter.
The comparative margins for the first quarter was 22.3% in this quarter, vis-à-vis 18.7% year-on-year and 22.8% in the previous quarter. The per tonne EBITDA was INR 1,247 per tonne as compared to INR 1,014 in the previous year and INR 1,265 a tonne in the previous quarter.
This performance has been led by -- the growth in the performance is led by a 15% growth in the Grey Cement volume during this quarter year-on-year, which was mainly on account of substantial growth in Central India, where we grew by over 50%. Attained growth in the South region, where the base was low and there has been a good growth, a good sale of clinker during this quarter. However, there has been some degrowth in the North, mainly on account of the market conditions as the North did not grow that much.
So if we look at the White Cement, the White Cement year-on-year grew by 8%. And so these are the major financial highlights. If we look at during this quarter, the company also completed debottleneck at Ujjain unit and now the consolidated capacity of the Grey Cement stands at 25.6 million tonnes.
The green power capacity as on 30th June is 184 megawatts. And the company also completed the acquisition of Saifco on 6th of June. So now Saifco becomes a subsidiary of the company and the management of Saifco has been taken over, and now company is working on improving the performance of Saifco in the J&K region.
The 6 million tonne greenfield and brownfield expansion is on track. The integrated unit at Panna, where we are adding a 4 million tonne clinkerization unit is on track. The brownfield grinding locations at -- of 1 million each at Panna, Hamirpur and Prayagraj are on track. And even the greenfield site at Buxar in Bihar is on track. And by end of this calendar year, mostly, we should be able to start and complete the expansion.
Looking to the growth in the putty volume and to meet out the peak demand, the Board also decided to go in for expansion of putty by 6 lakh tonnes with a total capital outlay of INR 195 crores. This will be set up in Rajasthan. This is to meet out the growth of putty.
The balance sheet position is that the gross debt as on 30th June stood at INR 5,203 crores as compared to INR 5,101 crores as on 31st March. The cash was INR 2,407 crores as compared to INR 2,536 crores. The net debt was higher at INR 2,796 crores as compared to INR 2,565 crores as on 31st March. The net debt to EBITDA as on 30th June, however, was 1.29 as compared to 1.30 and the debt equity -- net debt to equity was 0.44 as compared to 0.42.
These are the major highlights of the performance during the quarter. We'll be happy to address your questions. Thank you.
[Operator Instructions] The first question comes from the line of Amit Murarka from Axis Capital.
So firstly, on the Panna line, it was a 3.3 million tonne line. Just wanted to understand like why and how did it expand to 4 million tonne given that we are so close to commissioning?
No, no, it was always a 12,000 TPD.
Or is it like because I think the Q4 PPT still mentions 3.3 million and in this quarter only, it was mentioned as 4 million actually.
Okay. The 4 million tonne clinker capacity.
Okay. Fine, fine. Because I think it was initially announced as 10,000 TPD is what I remember and even the Q4 PPT mentioned it as...
Sorry, maybe there is some -- because 10,000 TPD was the increase from 8,000 to 10,000 for Line 1, which we did about a year back, but this has always been 4 million tonnes.
Okay. And secondly, could you let us know what was the incentive booked in the quarter?
Yes, Prashant, can you...
Yes, incentive for the quarter was INR 85 crores.
Okay. Okay. So I believe like last quarter, it was mentioned as like INR 75 crore to INR 80 crore range. So the new booking of incentives have come up in this quarter, even though volumes are lower Q-o-Q.
No that was...
No, see what happened that in the previous quarter, Aligarh unit where it has an overall ceiling, so that ceiling got exhausted by Q3. So there was no subsidy for the Aligarh unit in Q4. There's an annual cap on subsidy also.
Sure. Could you help us understand like what are the various incentives or in which plant basically are earning incentives right now? And how long will they continue these incentives?
So the incentives, we are getting one incentive in the North, which is for Nimbahera Line 3. And that is -- that would only be available in this fiscal. So that will get concluded. Otherwise, we are entitled for subsidy for the 3 grinding locations, Aligarh, Hamirpur and Prayagraj. Aligarh also, I think, is only 1 year is left because it was for 7 years. It was commissioned in 2020. And then we are getting for Ujjain and also in case of the Panna unit, integrated Panna plant.
Sure. Understood. So like Hamirpur also has it, right?
Yes, Hamirpur, Prayagraj, both have.
And Panna also and -- sorry, and Ujjain also.
Yes.
And these will -- given that these are newer units, fair to assume that these incentives will continue for a few more years?
Yes.
Sure. And lastly, just very quickly on other expenses. That was also quite low in the quarter. So like could you help us understand like what are the plans for marketing spends and all which are low in the quarter? Will it...
So actually it will be higher going forward because all our major -- the marketing spends, we have these dealer tours and all. So normally, we plan the tours everything in the second quarter, which is the lean period. So the marketing -- the other expenses will increase sequentially. So this is what we see that though this second quarter will be a tough quarter where there is also scheduled maintenance of the kilns as well as the branding expenses pre just the festive season. So all that gets started in this season. So we would be seeing an increase in the expenses in Q2.
[Operator Instructions] The next question comes from the line of Devesh Agarwal from IIFL Securities.
Firstly, congratulations, sir, on a good set of numbers. I just wanted to understand, firstly, what would be the regional breakup of volume, sales volumes for 1Q?
No, so regional broadly, we are not sharing the regional numbers.
Sir, broadly will also help, [Foreign Language] even if you give in some...
Broadly, we have given what has been the trend of increase in volumes as we saw in central, a growth in volumes of over 50% and kilns growth in the South because of a low base. All these numbers we have, but we are not sharing the exact regional numbers.
Sure, sir. And sir, the kind of capacity addition that we saw through debottlenecking Ujjain, 0.5 million tonne. What would be the potential at your other locations where you can increase capacity by debottlenecking?
So we have just -- one is, see, as a part of the expansion in Central India, 1 million tonne capacity is being increased at Hamirpur and Prayagraj, that is one which is part of the expansion plan. So -- and we see that there is a potential in the South of about 0.7 million, so we are just working on that.
Right, sir. And you mentioned in South, we had a clinker sale this time. Could you quantify, sir, how much was clinker sale?
Clinker sale has been much higher than the previous quarter.
No specific number?
No, no specific number.
And sir, for your recent acquisitions, both Toshali and Saifco, what are the plans? Do you see any big opportunity there in terms of capacity addition or it will take time?
So we see an -- I mean, one, as we said, in Toshali, we are still working out on the mining lease, which we have not been successful so far. And we are also evaluating alternate option of a long-term tie-up of the raw material with the Government of Odisha or identify certain areas and if something comes for auction. So that is the potential. And there, as we said, if the limestone tie-up is done, we have an opportunity of about 2.5 million to 3 million tonnes.
As regards to Saifco is concerned, yes, we see an immediate opportunity for upgrading the kiln by about 300 to 400, it's already -- it operates at about 600, 650 tonnes per day. We see an opportunity to 850 to 900 TPD per day. So that is immediate, but it has good limestone results, and we are working out on the possibility how if -- and that we will take maybe a year down the line, work out, see the market situation, how we settle. But we have the limestone and other facilities, so there is an opportunity of expansion up to 2 million, 2.5 million tonnes in that region.
Right, sir. And sir, post the 1Q where you have delivered strong volume growth, what would be our guidance outlook for FY '26 as a whole in terms of volume growth?
So we have given the guidance of about 20 million in this financial year.
Okay. So you stick to that 20 million tonnes?
Yes.
And finally, one last one, sir. In terms of your -- post your Panna expansion, where do you see the next leg of expansion? The 3 places that you mentioned, Jaisalmer, Odisha and Karnataka, any progress that we have made? And do we have visibility that next expansion will be taken at a particular location?
Yes, we are working out. We are close to finalizing and we shall be putting up our options to the Board very soon. And I think within -- I mean, very shortly, once the Board approves, could be guided to us because we've done in central, so more towards the north, but we are just -- so very soon, once we are through with all the numbers and options we'll put up to the Board and get back to you.
[Operator Instructions] The next question comes from the line of Vishal Biraia from Bandhan Mutual Funds.
Sir, the capacity for Panna for the...
Vishal, I do apologize to interrupt you, but your audio is too low. Could you please use your handset?
Is this better?
Yes, please go ahead.
Sir, I just wanted to confirm the clinker capacity at Panna, after this expansion, we would be at about -- would that be the right number?
Pardon. We couldn't hear. Prashant, you answer, you can just...
No, I could not hear what number he spoke actually.
After the expansion of clinker at Panna, what will be the capacity of clinker?
19 million tonnes.
No, at Panna itself...
7.3 million tonnes.
7.3 million tonnes. Okay. And total clinker after the commissioning of the Saifco plant, including that, we will be close to 18 million tonnes at the end of '26, at the time of March '26, this financial year?
No, no, 19 million, I am saying on a stand-alone basis, then Saifco is in the subsidiary.
Saifco and Toshali, if we add, then it will be close to 19.6 million or something.
Okay. Okay. And just to reconfirm the number for Grey Cement, this year after we commissioned all the GUs that you talked about will be close to 32 million tonnes capacity?
Yes. So we are already 25.26 million tonnes and 6 million tonnes is average, so we'll be 31.26 million. We have certain opportunities in the South, which we are working out. And if that materializes, it will be 32 million tonnes by FY '26.
Okay. Okay. And just some basic questions on paint. What is the cumulative investment that we have done in paint? And what is the capacity that we've created as of now?
So the capacity -- Prashant, you can answer this.
We have 60,000 kiloliters of capacity, and our investment total is close to INR 450 crores.
INR 450 crores. Okay. And how much incremental do you plan to do there?
We have an approval of INR 600 crores. So we will only -- remaining would only be restricted up to additional INR 150 crores.
And by when should we see that coming in?
FY '27.
[Operator Instructions] The next question comes from the line of Navin Sahadeo from ICICI Securities.
Also, congratulations on good set of numbers. My first question was on volumes. So you said that Central India has done much better. So is it that the industry itself had fairly strong growth? Or we have expanded our dealer network much further to take care of the upcoming expansions, be it on the eastern part of the regions. So before the grinding units come up, have we already started feeding those markets was my question.
Yes, we have already started -- with the expansion in view, and so it is -- we expanded. First, we put up 4 million, then we expanded it to 6 million and now another -- adding another 6 million. We have already doing a good volume in Bihar. We have entered Bihar. And I mean, hopefully, end of this fiscal year itself, we should be doing about close to 1 million tonnes maybe in Bihar.
Understood. And before the next question, I just want a clarification. You mentioned after -- because the previous participant asked, post expansion, what will be the total clinker capacity in Panna. And Prashant sir said, 7.3 million, shouldn't it be 8 million because 4 million is what we have already done with Line 1 and second line is 4 million. So it will be 8 million tonne or am I missing something here?
No, no, Line 1 is 10,000 TPD per day, and Line 2 is 12,000 TPD per day.
So Line 1 is 3.3 million.
Understood. Understood. That's clear. And sir, you also mentioned potential of debottlenecking in South by about 0.7 million to 1 million tonne. So will it also be backed by some sort of a clicker debottlenecking there? Or it's more on the...
Yes, so we are working out on debottleneck in South and other regions. Maybe we feel that about 0.7 million to 1 million, we could be able to achieve by debottleneck at all locations, and there will be some debottleneck both on the clinker side as well as cement grinding.
Understood. And sir, my last question, if I may. Margin in White is what I wanted to just point out because I believe sequentially there has been a pretty sharp drop in the White Cement realization, if I understand this correctly. So has it also led to a sharp margin decline in the segment and how should one then look at this segment given we are now looking at investing more capacity or more capital to put up a putty grinding unit in Nathdwara.
So see, as far as margins, yes, the White Cement, we have seen the margins declining sequentially. But I think now as we see, it has stagnated. I mean it is not -- there is no further major dip in the White Cement margins. It's ranging between 15% to 20%. So -- and we feel that it will continue to be in that region. The investment is necessary to ensure that we maintain our market share.
Otherwise, today -- I mean last year -- this year, our volume -- our targeted volume is about 1.1 million. And the peak season, the festival becomes -- closer to Diwali is always a peak season. And then we have peak season before the year-end, where to meet out the peak -- the present capacity is barely able to meet out the peak season demand. In fact, we have already started some volumes on tolling to beat the peak cement season demand. And we are envisaging a growth in the putty segment of between 7% to 10%. So with that growth -- taking that growth in mind, we would need additional capacity.
Excellent. Sir, just one last question about the potential expansion plans. Now I understand there is a vision to reach up to 50 million tonnes and you've highlighted that in the, I mean, similar calls in the past. But with now our EBITDA averaging like almost nearing to INR 3,000 crore or anywhere between INR 2,500 crore to INR 3,000 crore annually.
Will it be fair to say that we can handle 2 projects at a time? Is the company really thinking on those lines that apart from one project, we can also look at having not just doing one project at a time, but we can look at doing 2 projects at a time, is the company thinking on those lines so that growth can come in faster?
Yes, you're right, the company is thinking. Earlier, we were actually taking projects after completion. So there was a gap of maybe about 2 years, so 18 months when the project was getting completed, then we used to take up the next project. Now with our capacity reaching 30 million tonnes and the cash flow supporting for the investment and with a view that we get to 50 million tonnes by 2030, I think we could be, in a way, adding up a project, announcing a project every year. So this would mean that there would be 2 projects going on at a particular time. It's not that we'll not be announcing 2 projects at one time, but in between, when we are -- we have already started work, we'll take up the next project. We'll not wait till completion of the project.
[Operator Instructions] The next question comes from the line of Sanjeev Singh from Motilal Oswal Financial Services Limited.
If we exclude the clicker volume in 1Q, so how was the cement realization movement compared to last quarter? So basically, I want to understand how have been the price movement in different markets where we operate. And compared to 1Q, how have been the prices now?
So if we see the prices on an average have been more or less flat because there has been an increase in the South realization in this quarter. So the South is compensated, though, in the North and Center, there was a marginal pressure, but not much. And even now, up till now it's not much change except some -- a few -- it's very marginal. So it is not having any significant drop in pricing or anything.
But still, we have another 1.5 months at least till the end of August to see for the monsoon, we have to see that. And we are hopeful, I think there could be only -- there should not be any major dip in the pricing. Definitely, there is some pressure, which is leading to some reduction in the non-tech pricing. But beyond that, as of now, it is not much.
And secondly, in this quarter, we have spent closer to INR 350 crore, INR 400 crore CapEx. So how should we look at full year numbers in FY '26? Will it be closer to INR 1,700 crores? And also if you can guide on FY '27 numbers?
So this will be -- this year, it will be close to INR 2,000 crores. And next year, presently, we have the plans for the normal CapEx and the putty expansion what we have announced. So for all that, it should be close to INR 6 crores as of now.
The next question comes from the line of Hrishikesh from Kotak Mutual Fund.
Possible to share consol gross debt and net debt?
Hrishikesh, the numbers are same because on the consol, we don't have the borrowings and cash is also not there.
Okay, okay. And secondly, Mr. Saraogi spoke about company being comfortable taking probably 2 simultaneous expansions. So is there any internal thought in terms of what could be the potential borrowing we could be comfortable with or probably cap our borrowing anything, probably any metrics on debt-to-EBITDA or anything on that line?
So on the net debt to EBITDA, as we said, today, we are at about 1.3. Our debt to EBITDA, we are very cautious that whatever expansions we do we try and keep the net debt to EBITDA to 2 or below 2.
The next question comes from the line of Ritesh Shah from Investec Capital.
A couple of questions. Sir, can you give the total number for paints, grouts and adhesives? And if you could break it up, that would be great, along with the EBITDA that we clocked in the last fiscal?
No, the paint numbers are there, the grout numbers, grout is not part of paint, so we will give you the paint numbers. Prashant, that can be shared -- you can give you the paint numbers.
Yes, paint numbers have already been shared last quarter. We did INR 273 crores of the turnover of the paint in the last fiscal. And this quarter, our paint turnover is INR 86 crores.
And sir, margins?
The gross margin in paint is about 30%.
Sir, 30% EBITDA margins?
Gross margins.
No, gross margin. I wish with EBITDA margins, no paint company is getting...
No, no, EBITDA also we shared the numbers. It was, I think INR 45 crores of the EBITDA loss last year. And in this quarter, it is INR 10 crores of EBITDA loss.
Okay. That's useful. Sir, second is, Saraogi sir, you mentioned that North and Central, there was some marginal pressure in pricing. However, in South, the prices actually increased. Sir, how should one understand this dichotomy in pricing?
So I think, see, we have to see what really happens in the monsoon. The monsoons are now -- as I said that there has been some pressure on trade pricing -- marginal pressure on trade pricing, but not significant enough, but we have to -- we still have to wait and watch.
Okay. Sure. Sir, in the annual report, you do make a mention of LC 3 and PLC. These are 2 different types of cements I presume. Sir, what are our plans over here? And how should we understand this?
No, it is still at a very initial stage. We are working on it. And we see on LC3, what can be done. So it is still at a pilot stage and we're just working on it.
Sure. And sir, last question, do we utilize synthetic gypsum? If yes, what is the differential or the cost arbitrage that we derive out of it?
So gypsum, we are -- it's a various mix across and depending on availability and maxing of gypsum, we are in various -- we use even imported gypsum, chemical gypsum, we are using local mineral gypsum, which is available from the mines. There is a huge combination of gypsum products.
Sir, my question is, do we manufacture anything captively or do we...
No, no, we are not manufacturing anything captively. No, no nothing.
Okay. Okay. And sir, what will be the price gap on imported synthetic gypsum versus what we get from hypothetically, say, Rajasthan State Mineral something, RSMM adjusted for the grade, is there an element of cost savings over there?
See, again, the purity part, there is a difference. It affects once you use an imported gypsum, which is definitely very costly. But again, it helps using, I mean, reducing the clinker consumption and using more fly ash, so it does help. So we only see the thing only on a totality basis. The gypsum cost may be higher, but the overall cost economics is different.
Sure. And sir, just last question. You indicated that we did certain tolling volumes in peak season for putty. Sir, possible if you could quantify the number for full year last year?
So last year, the tolling, I don't have the exact number available with me, but I think it was around 50,000 tonnes or something. I will get back. I mean this is -- I don't have the number. Prashant, do you have the number?
No, we don't have the last year numbers now.
I will share you the exact number.
We take the next question from the line of Parvez Qazi from Nuvama Group.
And congratulations for a great set of numbers. So just 2 data-specific questions. What was our rail share this quarter and also the fuel mix in Q1?
Fuel mix was like 60% pet coke in this quarter.
And what was the rail share?
Rail share was 11%.
The next question comes from the line of Girija Sankara from Yes Securities.
So just wanted to check, you said if we use imported gypsum, so that is going to increase your fly ash percentage and it will reduce your clinker consumptions, right? So as per the rules, this time, how much is the percentage of the fly ash in the total clinker collections?
Pardon. I mean, see we can use fly ash up to 35%. 33% to 35%, we can go up to that.
But it is -- right now, we are -- our fly ash percentage is below 35% you are saying?
Yes, it depends. See, on an average when we talk about, it depends on the location and grinding location when we are talking, at least grinding location where we are getting what gypsum is available, it helps in that.
Okay, okay. And my next question is with regards to this power and fuel cost. So there is a sharp increase in power and fuel cost in quarter-on-quarter basis as well as for the freight cost also, we didn't see any kind of savings in freight costs. Any particular reason in that?
No, see, power and fuel cost increase means there are 2 reasons. One reason is because of the increase in the pet coke price, with the average consumption rate has gone up. And second is like the balanced clinker production in this quarter. I mean if you are comparing Q-o-Q basis, so last quarter, it was low because we consumed some clinker from the stocks. And this quarter, the clinker production was balanced. So these are the reasons for increase in the power and fuel cost. And freight cost increases, like our lead has gone up by 2 kilometers because of seeding the Bihar markets and all that. And that has resulted into a per tonne freight increase by around, say, INR 5, INR 6.
Okay. Okay. And my last question will be for the -- you mentioned in your opening remark, Central India has done well. So is this -- we have done it -- on a company level, this is good for our company or overall industry has done well in Central India? And what was the percentage you mentioned, I forgot.
It's over 50% in Central India. And this is because, see, we are opening up the entire market. We have already making -- we are trying to grow our market share across all the entire UP, MP and also and enter the Eastern region through Bihar grinding, which is coming up. So -- and a new capacity is going to come up in next few months. Maybe just 6 months down the line, we'll have a new capacity coming up. So unless we have built -- we have to strengthen the entire region. Otherwise, how we'll be able to supply material from the new plants.
Fair enough. But the last question is, are you -- can you give us the regional capacity utilization, if you can provide us?
No, no, we are not sharing regional capacity utilization numbers.
The next question comes from the line of Shravan Shah from Dolat Capital.
First of all, congratulations on a great set of numbers. Most of the questions are answered. A couple of things to clarify. So first, on the cost savings, what we have talked about last time, INR 150 to INR 200 over the next 2 to 3 years and this year, FY '26, on an average, we were looking at INR 40 to INR 50 per tonne. So that remains intact?
Yes, yes, that remains intact. We will, during this fiscal, get about INR 40 to INR 50 in terms of cost savings.
Okay. Great. And in terms of the green share, which is currently at 52%, so that we will be reaching to 60-odd percent by end of FY '26?
Yes, yes. So on the green power also, which is again as a part of cost savings when we say, so we should be closer to 60% by end of this fiscal.
Okay. Great. Second, sir, once this 6 million tonne will start by end of this December, so is it fair roughly to say in FY '27, one can see incrementally close to kind of a 3 million tonne volume from that, one can look at kind of a 50% utilization. Is that a way one can look at?
Definitely, that will be our -- I mean it's too early to say, but definitely, I mean, this is where we are working at and closer to the end of this fiscal when we try, definitely, we are working towards that direction only, whether it is 23 or it is 22.5, we'll just work out.
Yes. Actually, there will be some setup of the quantity, which we are already seeding into that market. In Bihar, already we have reached a particular level. So for 50% utilization, not the fresh volume has to come up to that extent.
Okay. Okay. Okay. Got it. Got it. And secondly, sir, last time, we had talked about that the UAE plant likely to kind of clock a quarterly EBITDA of INR 15 crores, INR 20-odd crores. So for this quarter, is it -- we have already reached to that EBITDA positive INR 15 crores, INR 20-odd crores?
Yes, yes, we have already reached, in fact, this quarter, the Fujairah working, I think for the year as a whole should be around INR 80 crores or so, INR 80 crores to INR 90 crores.
Great. Great, sir. Great. Second, on the paint, whatever we have said in terms of the revenue target, INR 400 crore, INR 450-odd crore in '26 and INR 600 crore '27 and breakeven by FY '27, that remains intact?
Yes, as of -- yes, that remains intact.
Okay. Okay. And then lastly, if you can help us, as you have said that the other expenses, so one is marketing, second maintenance in the Q2 will increase. Any idea, is it fair just INR 40 crore, INR 50 crore Q-o-Q increase, that's the way one can look at?
Yes, it could be around that region. Though exact numbers are not, but yes, you're right.
[Operator Instructions] The next question comes from the line of Tejas Pradhan from Citigroup.
Could you share what would be the industry volume growth for the different regions you operate for the first quarter? Because you mentioned North, there was some degrowth, right? So how would it be for like all the regions?
So we have to get the industry numbers. As yet, we are not getting I think industry numbers, you will know very soon. I think we are...
Sense from your side?
No. See, I think overall, we are -- we would be more than industry growth. But normally, when we see each region, we are able to maintain our market share. It's not that we have lost market share in any of the regions. In fact, we have actually improved upon our market share definitely in the Central. And North and other regions, we have not lost the market share. The North market is that the growth has not been -- the market growth is a major concern.
Sure, sure. And lastly, for the putty expansion, assuming the current profitability in that business, what would be the rough IRR that would be there from the expansion project that you have undertaken?
So IRR will be over 15%.
The next question comes from the line of Prateek Kumar from Jefferies.
Congratulations. My first question is a clarification on incentives. So based on current run rate, around INR 300 crore kind of incentive is expected for next 3 to 5 years based on your expansion and...
Yes, yes, this is what we see, yes.
Okay. Next question is on the central expansion. So incrementally, your trade segment has like sort of been stable currently. But the incremental volumes in Central, is this non-trade, trade is going to change, which may impact your profitability in the market? Or how do you look at it?
No. See, incrementally, yes, I mean, today, say, for example, from Bihar, because the grinding unit is not there, so we're not doing much of non-trade. But definitely, there will be some non-trade volumes coming up. But I think we are fairly confident we will be able to maintain the trade, non-trade ratio.
And last question on your White segment. So the expectation of Asian Paints volumes going off, I mean, customer base. Has that happened or is going to gradually happen over the next couple of quarters?
Yes. It has not -- I mean I think they just -- it will start hitting us from -- mainly from Q3 onwards. So they are about to -- I mean they are doing the trial runs what we have heard. So I think there will be gradually because even the orders, they are reducing the orders from Q3. So we will see that the number in the White Cement from Q3 onwards.
And just one last question, if I may. The sale of -- cost of traded goods was a much higher number at INR 1.5 billion this quarter, with a run rate of around INR 1 billion. What is the reason around that?
So traded goods is actually, we are getting a lot of tolling for all our value-added products, including paints. The traded goods in the stand-alone is coming whatever is being manufactured because the platform of J.K. Cement is being used. So when there is a platform of J.K. Cement used in stand-alone, it is the goods which gets transferred from the Max factory. And in J.K. Cement stand-alone books, it is a purchase of traded goods.
[Operator Instructions] The next question comes from the line of Rajesh Ravi from HDFC Securities.
Congrats on great set of numbers. My first question is predominantly on this volume guidance which you have given 20 million tonne, that remains or there is an upward bias given that the strong volume growth have delivered in Q1?
So we still take 20 million alone because we have a lean period. We have to see -- monsoon is a lean period. We have to see how the growth remains in that. But as of now, we stick to the earlier guidance of 20 million.
And just a follow-up question. See, there's a lot of capacities which are coming up in North, Central and East markets. So what is the outlook given that you are also bringing up almost 6 million tonne capacities across the Central and East markets?
Yes.
So what is your outlook on the pricing trend for next 1, 2 years given that the simultaneous ramp-up of various capacities over next 1, 2 years?
So see, one, the market is also growing. If you look at the total growth in the market, see North and Central being sort of a twin market, so if you look at the overall growth in that market, there is an incremental requirement in that market of about 12 million to 15 million tonnes. So as the capacities gradually ramp up, we don't see -- yes, there could be some periodical impact. But otherwise, we are not -- we don't foresee any major competitive intensity, which may affect the profitability.
The next question comes from the line of [ Alok Shah from SRE PMS ].
Am I audible, sir?
Yes, Alok, please go ahead.
Yes. So I just want to understand the reasons of increasing EBITDA by 20% this quarter. And is this sustainable for the current fiscal year?
And secondly, that we have targeted for 75% of green power by -- green power. So any guidance of EBITDA increase that we can expect in percentage? Or can you just give a ballpark number?
So we do expect that with the present prices continue and prices continue to -- if they further increase, definitely the EBITDA should also be increasing. As regards to the green power, definitely, 75% we have given the target for 2030. We would be closer to 60% by FY '26. And the plans which we have, I think this target should be -- will be met well before 2030.
The next question comes from the line of [ Rahil Shah from Crown Capital ].
My question was also pertaining to the EBITDA per tonne -- combined EBITDA per tonne outlook, if you can share something on that?
Okay. I think we already have given my views on that.
Yes. Any certain number you'd like to give out for the full year?
No, see, number -- I mean we have to see when -- I think number is -- would be in line with the industry growth rather than when we give any particular number.
The next question comes from the line of Siddharth Mehrotra from Kotak Securities.
Sir, just a quick question. I read in our annual report that we signed an agreement with GMDC for 250 million tonnes of limestone reserves. Could you just elaborate on our plans pertaining to that particular limestone? Will that be used in some of our existing plants? Do we plan some additional new plants in the Western region perhaps? What is our end goal for that 250 million tonnes?
So -- and see, we have entered, we have worked our limestone reserve, an agreement for that limestone. We will see that would help us in our future expansions. Immediately, we do not have any plans. So as we -- when we -- as a first step, we have a plan for a 50 million tonne expansion to reach 50 million tonnes of capacity. And as we are working towards that, then we have to -- going in next 2 years' time, we have to come up what will be our next goal of plans. So it may -- see, unless you have tie-up of limestone deposits, you cannot make any concrete plans. So this is for a long-term plan. So we continue to apply for potential limestone reserves once because we -- as of now, we have plans to go organically. We don't have any plans to go inorganic at all.
Okay. Understood. And just with reference to the location of this limestone, are there any plans on angle for expansion into the Western region, more particularly Gujarat?
Yes, that could be. As of now, we don't have an immediate plan to invest in there. But going forward, maybe yes.
The next question comes from the line of Parth Bhavsar from Investec.
Sir, I have just one question. I wanted some like color on non-trade demand. So if you see like even year-on-year and quarter-on-quarter, non-trade share has increased for us. So I wanted a sense on demand of non-trade segment and also the pricing. Like has it been more stickier than trade segment or even the price hikes have been more higher than the trade segment, yes, color on the non-trade segment?
So see, again, as government spending is there, so the demand -- if overall demand increases only in the non-trade segment, then to maintain the market share, we will have to enter that segment and get -- otherwise, it would be very difficult to get the entire growth from the trade segment.
As regards the pricing, the non-trade pricing has been also because it becomes quite intensive sometimes and very aggressive and the prices do fall. But with this, there has also been increase in the non-trade pricing over the last 2, 3 months when we have seen the increase in the trade pricing because the pricing of both trade and non-trade have to increase in tandem. It cannot -- the differential cannot be very high.
Sir, what would be the differential right now versus what it was last year?
See, normally, the normal trend is of the difference between trade, non-trade is about INR 20 to INR 25 a bag.
Okay. And this has been stable even since last 1 year, 2 years?
No, no, it has not been. So whenever the difference has been, it has been fluctuating. So that definitely affects as we have seen that in the past, the trade prices were going down, the differential between trade and non-trade had also increased sometimes even up to INR 40, INR 50, INR 60 a bag. Sometimes it can go in particular region, INR 70, INR 80. So it is quite fluctuating.
The next question comes from the line of Amit Murarka from Axis Capital.
So just on the follow-up question on the volumes. You mentioned that you are scaling up your volumes in Bihar as well. And there is a new grinding unit of 3 million tonnes that will come up. So like will this new grinding unit have incentives as well, like particularly as we have already scaled up decent volumes over there?
Yes, the grinding unit, there is an incentive scheme. And once we commission the grinding unit. So we have already applied and we should be getting certain incentives.
Ladies and gentlemen, we take the last question from the line of Ritesh Shah from Investec Capital.
Yes. Sir, just a quick one. Would it be possible for you to quantify the trade and non-trade price gap in North, Central and South?
No. So it varies from time to time, it's very difficult. As I say, average INR 20, INR 25 is a normal trend. But when the prices fluctuate, it gets -- it is quite different from time to time.
Okay. And sir, would you like to put any time lines on the Jaisalmer optionality that we have?
Yes, the time line, I think, I mean we -- whatever options are there, where you should within -- very soon, I think the management should take a call on that and put that with the board.
Ladies and gentlemen, we take that as a last question and conclude the question-and-answer session. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Pvt. Ltd. for closing comments.
Yes. Thank you. On behalf of PhillipCapital (India) Pvt. Ltd., we'd like to thank the management of J.K. Cement for the call and also many thanks to participants who are joining the call. Thank you very much, sir. Ryan, you may now conclude the call. Thank you.
Yes. Thank you, everyone, for joining the call. Thank you.
Thank you.
Have a good day.
Thank you, sir. On behalf of PhillipCapital (India) Pvt. Ltd., that concludes this conference. Thank you for joining us, and you may now disconnect your lines.