Tata Hitachi Construction Machinery Co. excavator operates outside the blast furnace unit. (Photographer: Udit Kulshrestha/Bloomberg)

JK Cement May Announce Capacity Expansions Plans By End Of This Year

JK Cement Ltd. is looking at augmenting its grey cement capacity through a greenfield or brownfield unit, and expects to announce this expansion by December quarter of the current financial year, Chief Financial Officer AK Saraogi told BloombergQuint.

Currently, the company’s grey cement capacity stands at 10.5 million tonnes (MT), while for white and putty it stands at 0.6 MT and 0.7 MT. Grey cement has a higher concentration of iron compounds, compared to white cement. The company has already announced plans to double wall putty production from existing 2 lakh tonnes to 4 lakh tonnes per annum in an exchange filing, but didn’t disclose a timeline for the same.

Further, the board has also decided to increase its clinker production capacity by 3.30 lakh tonnes per annum in Rajasthan grey cement plants by upgrading the plant, costing approximately Rs 50 crore.

On volumes front, Saraogi expects the company to deliver a 7-8 growth for 2017-18 and 2-3 percent growth in the first quarter of the current financial year as production may be hampered by some land-related issue in Uttar Pradesh, said Saraogi.

The company delivered a good set of numbers last fiscal. Its revenue increased 7.7 percent year-on-year to Rs 1,018.9 crore in the January-March quarter above Bloomberg estimates of 986.60 crore. Meanwhile, net profit during the period also grew 30.40 percent to Rs 91.4 crore, well above estimates of Rs 68.38 crore.

Volumes in the fourth quarter of 2016-17 stood at 1.86 MT, up 2 percent (YoY) and 12 percent sequentially. Its FY17 volumes stood at 6.79 MT, down 1 percent (YoY).

Shares of the JK Cement rose as much as 11.61 percent in the early trade on Monday, to the levels last seen in March 2006. The stock was trading 3.49 percent higher at Rs 1,109 on the NSE at 12.03 p.m.