JK Cement expects 10% revenue growth this fiscal

Despite a blip in sales in the April-June 2021 quarter on account of pandemic-led disruptions, JK Cement is “optimistic” and expects its growth momentum to continue in 2021-22 also, recovering quickly in the rest of nine months led by a “good growth”, JK Cement Chief Operating Officer (Grey Cement Business) Rajnish Kapur told .

Besides, the company expects its expansion project at Panna, Madhya Pradesh, to be completed in the next financial year; after which, it would have a manufacturing capacity of nearly 20 million tonnes per annum (MTPA) from the current installed capacity of 14.7 MTPA.

JK Cement envisages having a production capacity of 25 MTPA in the next five years and is open to take “bold decisions” for expansion including acquisitions, Kapur said.

“As a company, we are looking to get 20 million tonnes with the new capex (capital expenditure) expansion in Panna and planning to see how we can reach 25 million tonnes in the next five years,” he said.

Work at Panna is delayed because of the pandemic and is now expected to be completed in 2022.

After expansion at Panna, some of the existing markets will be better and new markets will come in.

“We are almost available in the north, central, and west; and not only this, white cement is exported to other countries, too,” he added.

Last fiscal, JK Cement had a robust performance, as its consolidated revenue from operations was up 15 per cent to Rs 6,233 crore and EBITDA (earnings before interest, tax, depreciation and amortisation) reached up to Rs 1,514 crore. Its market capitalisation had increased three times to reach USD 3 billion in 2020-21.

Terming it as “one of the finest” year in the history of the company in terms of performance and result, Kapur expects this to continue in the current fiscal as well.

When asked about the growth, he said, “Last fiscal, we did close to Rs 1,500 crore (EBITDA). We will be targeting more this year. We had good growth last year and we are expecting 8-10 per cent topline (revenue) growth this year.”

“Given the vibrant economic climate that we have in our country, with a lot of highway and metro projects coming up, I am optimistic that in the coming nine months, we will have good growth,” he added.

On the April-June quarter, in which the second wave of COVID-19 hit the country, Kapur said the start of this fiscal was one of the “toughest times”.

“The July-September quarter will not be too fruitful as we have monsoon but in comparison to the monsoon quarters of other years, we will be in good condition as there is a lot of demand on the ground that needs to be satisfied. For third and fourth quarters, we are very confident,” he said.

Meanwhile, he also said the possibility of a third wave will also be considered and as a company, JK Cement is planning for that also.

On capital expenditure (capex) or investment, Kapur said it must make sense to the company’s long-term plan and did not rule out an acquisition for the growth of the company.

“Limestone reserve, transfer of mines, availability of cash flow, it all matters. But, at the same time, we are certainly open to taking bold decisions and new challenges for the expansion if they make sense to our long-term strategy,” he said.

On retail sales of cement for individual house construction, etc, Kapur said it would come back. “It might not be as much as we are expecting it to be but it will go up.”

The only challenge would be the money at the hand of people to start construction at the individual level which hopefully would improve by jobs coming back, he said.

According to him, people have now realised that life has to go normal beyond COVID-19 also.

“If you look at per-capita consumption, the young population and the way we are becoming more of a nuclear family, I do not see any reason why retail will not come back,” he said.

“I also feel that post-COVID-19, the workforce has localised now. Because of this, people are making houses and doing construction,” Kapur added.

Besides, the company has also launched a new brand logo for JK Cement, which, according to Kapur, reflects its core values and a rich legacy of trust.

“Our logo carries the first initial of our founder, Yadupati Singhania. The symbol ‘Y’ also signifies the tree of growth which has three colours.

“Green signifies the vision of sustainable growth. Grey stands for the grey business which is the foundation of the company. Blue shows the limitless opportunities that we have in the industry,” he said.