JK Lakshmi Cement is entering a multi-year expansion phase, targeting total cement capacity of 30 million tonnes per annum (mtpa) by FY30. The strategy, driven by phased capacity additions, a sharper sales mix and tighter cost controls, is aimed at strengthening long-term earnings visibility while maintaining balance-sheet discipline.
The company believes it is well placed to benefit from the next leg of industry demand growth, particularly as infrastructure spending and housing activity gather pace outside the large metros.
Expansion anchored in brownfield projects
JK Lakshmi’s capacity expansion plan is largely brownfield in nature over the next few years, followed by selective greenfield projects. Capacity is expected to rise from the current 18 mtpa to around 22.6 mtpa by FY28, led by the Durg brownfield expansion in Chhattisgarh.
The Durg project includes 4.6 mtpa of grinding capacity and a 2.3 mtpa clinker expansion, with a total estimated capex of about Rs. 3,000 crore. Around 70% of this investment is expected to be funded through debt. In parallel, the company is setting up three split-location grinding units with a combined capacity of 3.4 mtpa at Prayagraj, Madhubani and Patratu, strengthening its footprint in key consumption markets.
Beyond FY28, JK Lakshmi plans greenfield cement plants at Nagaur in Rajasthan (3 mtpa), Kutch in Gujarat (3 mtpa) and Assam (2–2.5 mtpa). Management expects greenfield costs to be around $100 per tonne by FY30, in line with industry benchmarks, keeping the company on track to achieve its 30 mtpa ambition.
Focus on margins and cost efficiency
Alongside capacity growth, the company is focusing on improving profitability through premiumisation, higher blended cement volumes and operational efficiencies. Premium products now account for about 26% of sales, a share management intends to raise further to support margins.
Cost optimisation remains a key pillar of the strategy. Renewable energy already accounts for roughly 46–49% of total power consumption and is expected to rise over time, helping lower energy costs and reduce volatility. Management has reiterated a cost-reduction target of Rs. 100–120 per tonne over the next 18–24 months, driven by improved plant efficiency, logistics optimisation and higher green power usage.
JK Lakshmi has also guided that it aims to achieve an EBITDA per tonne of around Rs. 1,000 in the medium term, supported by these initiatives and a better product mix.
Volume growth and market position
The company has outperformed industry volume growth in recent quarters and expects to sustain this momentum. It holds an estimated 10–14% market share in core regions such as Rajasthan, Gujarat and Chhattisgarh, where it plans to defend and deepen its presence.
Industry demand is expected to strengthen towards the end of FY26. Factors such as improved affordability, housing demand and a supportive tax environment — including the reduction in GST from 28% to 18% — are seen as positive for medium- to long-term cement consumption, particularly for premium products.
Valuation and outlook
Despite elevated capex over the next few years, JK Lakshmi has reiterated its intention to keep net debt within 3–3.5 times EBITDA. The company is currently trading at an EV/EBITDA multiple of about 7.8x, 7.1x and 6.6x for FY26E, FY27E and FY28E respectively.
On the back of improved earnings visibility, margin expansion potential and disciplined execution, analysts have retained a Buy rating on the stock, with a price target of Rs. 992, reflecting confidence in JK Lakshmi Cement’s next phase of growth.
