Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JK Lakshmi Cement Ltd (BOM:500380, Financial) maintained its market share in core regions despite challenging market conditions.
- The company achieved a significant reduction in variable costs, down by 11% year-over-year.
- Renewable energy usage increased to 40%, with 20% coming from solar and wind sources.
- The company reported a decrease in overall costs by 5%, with power costs down by 9% and fuel costs by 22%.
- JK Lakshmi Cement Ltd (BOM:500380) is progressing with its expansion plans, including a 4.6 million ton cement capacity increase in the East.
Negative Points
- The company experienced a 9% decline in volume on a consolidated basis due to subdued demand and depressed pricing.
- Prices dropped by approximately 8% in key markets, impacting revenue.
- Freight costs increased by 4% year-over-year, aligning with inflation rates.
- There was a delay in the ramp-up of the expanded facility at Jaipur Cement Works due to external factors.
- The merger with Udaipur Cement Works is expected to take longer than anticipated, with completion projected in the second half of 2025.
Q & A Highlights
Q: When is the merger with Udaipur Cement Works expected to be completed?
A: Arun Shukla, President and Executive Director, explained that the merger process involves approvals from stock exchanges and SEBI, which could take 3 to 4 months. The company expects the merger to be completed in the second half of 2025, although they are trying to expedite the process.
Q: What is the status of the expansion in the East, and how much CapEx will be spent?
A: Arun Shukla stated that the expansion involves 4.6 million tons of cement and 2 to 2.3 million tons of clinker. The first phase is expected to be completed in FY26-27, with initial CapEx of INR100-250 crores this year, increasing in subsequent years.
Q: Why has there been a delay in the ramp-up of the expanded facility at Jaipur Cement Works?
A: Sudhir Bidkar, CFO, mentioned that the delay was due to the election and demand cyclicity. However, the company is now on track to meet its plans for the year.
Q: What are the utilization rates for clinker and cement in the UCWL expansion?
A: Sudhir Bidkar reported utilization rates of 83% for clinker and 65% for cement at Udaipur, with overall cement utilization at 37%.
Q: How has the company managed market share despite a 9% volume decline?
A: Arun Shukla clarified that the company has maintained or increased market share in core markets. The volume decline was a strategic decision to avoid selling in non-core markets where prices were below variable costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
