JK Cement margin recovers sequentially, but YoY profit falls 15.31%
Costs grew 24.80% YoY against 20.26% revenue growth; the stock's +4.95% t1 move exceeded its 3.43% median post-results move.
Filed 18 Jul 2026, 15:51 IST · after market close · J K Cements Ltd (JKCEMENT)
Key takeaways
- Revenue grew 20.26% YoY, but operating margin narrowed 3.07 percentage points as expenses rose 24.80%.
- Sequential operating margin recovered 2.14 percentage points to 15.42%, but higher interest and a 6.98-percentage-point tax-rate increase drove net profit down 17.00%.
- Management linked double-digit volume growth to the H2 FY26 commissioning of a 6 MTPA expansion, while the stock gained 4.95% by t1 against a 3.43% median historical reaction.
Price around the results
Revenue growth did not translate into consolidated profit growth
In consolidated Q1FY27 results, revenue rose 20.26% YoY, but expenses grew faster at 24.80%, leaving operating profit almost flat at +0.25% and narrowing operating margin by 3.07 percentage points. Profit before tax fell 16.97% as interest rose 5.12%, depreciation increased 13.88% and other income declined 30.46%. Other income represented 9.66% of pre-tax profit, so reported earnings included a material non-operating contribution.
Sequential margin recovery was offset below operating profit
Revenue increased 3.71% QoQ while expenses rose only 1.15%, allowing operating margin to recover 2.14 percentage points. That improvement did not carry through to net profit because interest increased 16.58% and the tax rate rose 6.98 percentage points to 32.38%. Net profit consequently declined 17.00% QoQ despite the operating-profit recovery.
Margin is off its trough but remains below last year's level
Operating margin has recovered from 10.75% in Q2FY26 to 15.42% in Q1FY27, after moving through 13.88% in Q3FY26 and 13.28% in Q4FY26. The company was 1.86 percentage points above the 13.56% median operating margin of 12 reported Commodities peers.
Expansion ramp-up supported volumes as capacity plans advance
Management said volumes grew by double digits because a 6 MTPA expansion commissioned in H2FY26 was ramped up. The company said it is progressing towards 50 MTPA of grey cement capacity by FY30, with Jaisalmer, Bikaner and Bhatinda expansions scheduled for commissioning in H1FY28. Management also said cement demand is expected to grow 7–8% annually and that FY27 infrastructure capex is estimated to be 17.7% higher than last fiscal.
The market reaction was firmer than the stock's usual result-day move
The stock opened with a -2.40% gap but ended t0 at +1.15%, before reaching +4.95% by t1. That t1 move was above the 3.43% median absolute move across the last eight results, although the historical record was evenly split between four rises and four declines. The reaction was therefore positive but not part of a consistent one-way pattern.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,032 cr | ₹3,888 cr | +3.71% | +20.26% |
| Other income | ₹39 cr | ₹41 cr | -4.94% | -30.46% |
| Expenses | ₹3,410 cr | ₹3,371 cr | +1.15% | +24.80% |
| Operating profit | ₹622 cr | ₹516 cr | +20.43% | +0.25% |
| Operating margin (%) | 15.42% | 13.28% | — | — |
| Interest | ₹114 cr | ₹98 cr | +16.58% | +5.12% |
| Depreciation | ₹167 cr | ₹182 cr | -8.57% | +13.88% |
| Profit before tax | ₹406 cr | ₹444 cr | -8.44% | -16.97% |
| Tax | ₹132 cr | ₹113 cr | +16.75% | -20.24% |
| Net profit | ₹275 cr | ₹331 cr | -17.00% | -15.31% |
| EPS (₹) | ₹35.91 | ₹43.08 | -16.64% | -14.48% |
Operating margin of 15.42% compares with a Commodities sector median of 13.56% across 12 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.15% | +1.54% |
| Next session | +4.95% | — |
Volume on the results session was 1.17× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Volumes saw double-digit growth due to ramp-up of a 6 MTPA expansion commissioned in H2 FY26.
Guidance & outlook
- Cement demand is expected to grow 7–8% annually.
- Infrastructure capex for FY27 is estimated to be 17.7% higher than last fiscal.
- The company is progressing towards 50 MTPA of grey cement capacity by FY30.
Expansion
- The Jaisalmer expansion is scheduled for commissioning in H1 FY28.
- The Bikaner 2 MTPA split grinding unit is scheduled for commissioning in H1 FY28.
- The Bhatinda 2 MTPA split grinding unit is scheduled for commissioning in H1 FY28.
- The 6 lakh MT wall putty plant at Nathdwara is scheduled for commissioning in Q2 FY27.
Competition
- The company describes itself as among India's top five cement manufacturers.
What to watch
- Whether operating margin holds above 15.42% after the sequential recovery.
- Whether interest growth moderates from +16.58% QoQ and the tax rate from 32.38%.
- Status of the 6 lakh MT Nathdwara wall putty plant scheduled for commissioning in Q2 FY27.