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JK Cement Ltd reported decent earnings in the June quarter. Cement volumes were 71% higher year-on-year to 3.02 million tonnes (mt) in-line with expectations, and grey cement volumes including clinker rose 73% y-o-y to 2.76mt. Further, its white cement volume improved 50% y-o-y to 0.26mt.

Volumes growth was aided by around 40% capacity expansion in its key market and the company continues to gain market share on the back of that. Analysts at Motilal Oswal Financial Services Ltd expect market share gains to continue over the next four-five years as the company is now setting up a 4mtpa greenfield plant, which would commission by 1QFY24, in central India. This plant should improve the regional mix for north and central India to nearly 85%, said the domestic brokerage house in a report.

"We expect JK Cement to deliver an above-industry volume CAGR of 12% over FY21–23E on account of its expansion in north India. It should help the company move down the cost curve by lowering power and fuel as well as other costs," added the report.

As far as earnings are concerned, the company's standalone revenue and adjusted profit after tax rose 69% and 168%, respectively in the June quarter, compared to the same quarter a year ago. The earnings beat on these parameters was aided by higher grey cement realisations.

That along with cost curbs aided its operating performance. JK Cement's Ebitda/tonne was ahead of analysts' expectations at Rs1,323, up 17% sequentially and 9% y-o-y.

Meanwhile, standalone net debt rose on a sequential basis at Rs1,400 crore from Rs1130 crore in March 2021. Thus, net debt/Ebitda stood at 0.83 times compared to 0.75 times in Q4FY21.

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