JK Cement Ltd reported a standalone PAT of ₹870 Cr in FY25 with revenue of ₹11,093 Cr, growing ~13% YoY. EPS jumped to ₹112.59, and a ₹20/share dividend was declared. But beneath this smooth surface lie two Competition Commission penalties worth ₹163 Cr still under dispute. Is this India’s cleanest cement play or just another grey area?
🧱 About JK Cement
- Founded: 1975, part of JK Organisation
- Products: Grey cement, white cement, wall putty (JK WallMaxX)
- Presence: PAN-India + UAE (via JK Cement Works, Fujairah)
- Global Capacity: 20 MTPA+
- Recent Additions: Acquired Toshali Cements in Odisha
It’s the white cement king of India, now expanding into paints, green cement, and Middle East markets.
🧑💼 Key Management
| Name | Role |
|---|---|
| Raghavpat Singhania | MD |
| Shambhu Singh | VP (Legal), CS |
| SR Batliboi & Co. | Auditor (Unmodified) |
✅ Audit: Clean opinion
⚠️ CCI penalties (~₹163 Cr) not provisioned yet — Supreme Court hearings pending
📊 FY25 Financial Highlights (Standalone)
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) | Change |
|---|---|---|---|
| Revenue from Ops | ₹11,093.18 | ₹9,835.49 | 🔼 +12.8% |
| EBITDA (est.) | ₹2,130.6 | ₹2,050.2 | 🔼 +3.9% |
| Net Profit | ₹870.01 | ₹830.64 | 🔼 +4.7% |
| EPS (Basic) | ₹112.59 | ₹107.50 | 🔼 +4.7% |
| Dividend | ₹20/share | ₹15/share | 💰 +33% |
| EBITDA Margin | 19.2% | 20.8% | 🔻 -160 bps |
| PAT Margin | 7.8% | 8.3% | 🔻 -50 bps |
⚒️ Slight margin compression due to input costs, but growth intact. EPS is now in three digits club.
🧾 Consolidated vs Standalone
| Metric | Consolidated (₹ Cr) | Standalone (₹ Cr) |
|---|---|---|
| Revenue | ₹12,052 | ₹11,093 |
| Net Profit | ₹872.17 | ₹870.01 |
| EPS | ₹111.44 | ₹112.59 |
| Total Assets | ₹16,681 | ₹16,338 |
| Equity (Net Worth) | ₹6,055 | ₹6,065 |
📉 Consolidated EPS lower due to losses in overseas subsidiaries, especially Fujairah. But the India business is rock solid.
💸 Fair Value Estimate
- EPS (Standalone): ₹112.59
- Sector PE: ~30x (Ambuja, Ultratech range)
- Fair Value Estimate: ₹112.59 × 30 = ₹3,378
- But Market CMP = ₹5,107 = 45x PE
🎯 So clearly, the market is pricing:
- White cement leadership ✅
- Strong RoE ✅
- Low debt ✅
- Expansion visibility ✅
…or just running on cement fumes.
🧠 EduInvesting Take
JK Cement is that rare combo — a clean cement player with:
✅ White cement + putty moat
✅ Regional expansion + low debt
✅ High RoE + decent dividend
✅ Smart acquisitions (Toshali)
✅ Great cash flow: ₹2,049 Cr from ops in FY25
But also…
🚨 Two unresolved CCI litigations totalling ₹163 Cr
🧾 Overseas arms (JK Cement Fujairah) still posting losses
🔻 Margins slipping slowly
And yet, the market has rewarded it with a PE of over 45x.
If Ultratech is cement’s HDFC Bank, JK Cement is its Kotak Mahindra — rich, respected, but expensive AF.
⚠️ Risks & Red Flags
- 🧨 ₹154.82 Cr CCI penalty pending in SC (No provision made)
- 🚩 Additional ₹9.28 Cr CCI penalty also under litigation
- 🏗️ UAE business yet to show meaningful recovery
- 📉 Margins under pressure from energy/freight costs
- ❄️ Seasonal risks + monsoon dependency
📦 Balance Sheet Snapshot
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Total Assets | ₹16,338.79 | ₹14,284.55 |
| Net Worth | ₹6,065.48 | ₹5,353.39 |
| Total Borrowings | ₹4,600.34 | ₹4,177.22 |
| Cash & Equivalents | ₹252.47 | ₹97.20 |
| Inventories | ₹994.03 | ₹1,067.53 |
| Trade Receivables | ₹659.32 | ₹460.40 |
📌 Leverage still manageable, with debt/equity = 0.76x
💰 Cash Flow Highlights
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Operating Cash Flow | ₹2,049.28 | ₹1,894.95 |
| Investing Cash Flow | ₹-2,015.77 | ₹-1,739.63 |
| Financing Cash Flow | ₹73.83 | ₹415.72 |
| Net Cash Flow | ₹103.52 | ₹-92.41 |
✅ Robust cash from operations
⚠️ Capex still elevated, especially for UAE + Toshali expansion
🧾 Final Verdict
JK Cement is not cheap. But it’s clean, consistent, and quietly compounding, especially in the white cement segment — a rare un-disrupted niche.
- CMP ₹5,107
- EPS ₹112.59
- Dividend ₹20
- Strong cash flows
- Low red flags (except CCI)
This one’s not for the thrill seekers. But for those who love cementing long-term wealth, it’s a beauty.
Author: Prashant Marathe
Date: May 24, 2025
