JK Cement cuts capex, warns on costs
The cement maker slashed FY28 capex guidance by at least 20% without explanation, while warning that fuel and diesel will squeeze margins next quarter.
— 5 earlier stories on JK Cement Ltd. →What's new
- Capex guidance cut to ~₹1,200 cr from ₹1,500-2,000 cr range, no reason given.
- Cost warning: ₹150/tonne extra in Q2, with fuel alone adding ₹75-100.
- Paint business reached EBITDA break-even at ₹125 cr quarterly revenue.
Why this matters
The unexplained capex cut raises questions about growth timelines and capital allocation. Combined with margin pressure from rising costs, JK Cement's near-term profitability faces a double squeeze.
What we're watching
- Management's rationale for the capex reduction, if any emerges.
- Q2 margin impact as the ₹150/tonne cost increase hits.
- Whether the 40MT capacity target by FY28 remains realistic.
The full read
JK Cement's Q1 numbers look solid: 22% revenue growth, 19% volume jump. But the story is in the guidance. The company slashed its FY28 capex range to ~₹1,200 crore from ₹1,500-2,000 crore, a cut of at least 20% with no explanation. That is the biggest signal in this call. Management still talks about 40 million tonnes capacity by FY28 and a Jaisalmer greenfield starting by H1 next fiscal, but the capex pullback raises real questions about whether that timetable holds. Next quarter brings a ₹150/tonne cost hit from fuel and diesel, which will test margins that already slipped from 21.9% to 16.9%. The paint business breaking even at ₹125 crore revenue is a bright spot, as is the 19% volume growth. The open question is capital discipline: if JK Cement won't explain why it cut spending, the burden is on the company to show the old targets still hold.
Questions answered
- Why did JK Cement cut its FY28 capex guidance?
- Management reduced the range from ₹1,500-2,000 cr to ~₹1,200 cr without providing a reason. The cut suggests a shift in priorities or financing constraints, but no explanation was given.
- How will the cost increase affect Q2 margins?
- Per-tonne costs are expected to rise by ₹150, led by fuel and diesel (₹75-100 from fuel alone). With EBITDA margin already at 16.9%, the increase could compress margins further unless volumes compensate.
- Is the 40 million tonne capacity target still on track?
- Management maintains the FY28 target, with the Jaisalmer greenfield plant slated to start in H1FY28. The capex cut raises doubts about whether this timeline is achievable.
- What is the status of the paint and ready-mix concrete (RMC) businesses?
- Paint turned EBITDA-breakeven at ₹125 cr revenue. RMC has 17 plants and ₹35-40 cr sales but remains marginally loss-making.
- What drove the EBITDA margin decline from 21.9% to 16.9%?
- While net sales rose 22% to ₹3,952 cr, cost pressures from fuel and logistics compressed margins. Management flagged fuel costs as a key driver of upcoming inflation.
- How did grey cement volumes perform and what drove growth?
- Grey cement volumes grew 19% YoY, driven by the central India expansion and the new Bihar grinding unit. This strong volume growth partially offset margin pressure.
JK Cement Ltd.
Latest quarter · Jun 2026
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Story so far
All notes on JKCEMENT →- 20 Jul 2026 · 6:47 PM IST JK Cement cuts capex, warns on costs
- 1d ago JK Cement warns of ₹150/tonne cost spike in Q2 as paint swings to breakeven
- 4d ago JK Cement's profit slipped 12% despite 21% revenue growth as margins compressed
- 28d ago JK Cement wins a limestone block, keeps the numbers quiet
- 47d ago JK Cement locks in a coal mine. No price, no timeline.