JKCEMENTNSEQ2 FY2323 November 2022

JK Cement Limited

3,138words
57turns
6analyst exchanges
3executives
Management on call
Amy Kunnnn Smlocr
Dnpurv MANlcrNc
Sumwsn Klunonlwal
Dnpurv CFO' JK
Ajay Kumar Saraogi
Deputy Managing Director and CFO' Mr' Sumnesh Khandelwal
Key numbers — 40 extracted
836crore
ernber 22' The majorhighlights: TherevonuefromoperationsduringthisquarterwasZ,ll}croresasagainstl'836croresan increaseoflT%,otherincomewaslowerat23croresasagainst43crores.Theoperating expenses were higher
23crore
operationsduringthisquarterwasZ,ll}croresasagainstl'836croresan increaseoflT%,otherincomewaslowerat23croresasagainst43crores.Theoperating expenses were higher by 22o/o atl,846 crores as against 1'507 crores
43crore
hisquarterwasZ,ll}croresasagainstl'836croresan increaseoflT%,otherincomewaslowerat23croresasagainst43crores.Theoperating expenses were higher by 22o/o atl,846 crores as against 1'507 crores' Theprofitbefor
,846 crore
eoflT%,otherincomewaslowerat23croresasagainst43crores.Theoperating expenses were higher by 22o/o atl,846 crores as against 1'507 crores' Theprofitbeforeta)(was16Tcroresasagainst24gcrores.Theprofrtafterta:(wasl
507 crore
rat23croresasagainst43crores.Theoperating expenses were higher by 22o/o atl,846 crores as against 1'507 crores' Theprofitbeforeta)(was16Tcroresasagainst24gcrores.Theprofrtafterta:(wasl35crores asagainst16gcr
35crore
s as against 1'507 crores' Theprofitbeforeta)(was16Tcroresasagainst24gcrores.Theprofrtafterta:(wasl35crores asagainst16gcrorosadropof'26Vo.TheEPSwasRs.16,16paisaasagainstRs.2l.85paisa. TheEBITDAduringthis
Rs.16,16
16Tcroresasagainst24gcrores.Theprofrtafterta:(wasl35crores asagainst16gcrorosadropof'26Vo.TheEPSwasRs.16,16paisaasagainstRs.2l.85paisa. TheEBITDAduringthisquartgrwas303croresasagainst35gcroresinthepreviousy
Rs.2
rores.Theprofrtafterta:(wasl35crores asagainst16gcrorosadropof'26Vo.TheEPSwasRs.16,16paisaasagainstRs.2l.85paisa. TheEBITDAduringthisquartgrwas303croresasagainst35gcroresinthepreviousyear' EBITDA margin
303crore
st16gcrorosadropof'26Vo.TheEPSwasRs.16,16paisaasagainstRs.2l.85paisa. TheEBITDAduringthisquartgrwas303croresasagainst35gcroresinthepreviousyear' EBITDA margins was 14.49% as against 19 95% last year' Ifyoul
14.49%
isa. TheEBITDAduringthisquartgrwas303croresasagainst35gcroresinthepreviousyear' EBITDA margins was 14.49% as against 19 95% last year' Ifyoulookattheperfonmanceforihe6montlrsApriltoSepxembertherevenuefrom
95%
thisquartgrwas303croresasagainst35gcroresinthepreviousyear' EBITDA margins was 14.49% as against 19 95% last year' Ifyoulookattheperfonmanceforihe6montlrsApriltoSepxembertherevenuefromoperations hadino
14,2022 crore
rores.Theotherinoomewaslowerat45 fr J Kctr rn # nt iP Phiuipcapitat JKCement Ltd. Ltd. November 14,2022 crores as against 75 crores. The operating expenses lvas higher at32o/oat 3,61 I as agutstzJ4l crores. Th
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Guidance — 17 items
Vaibhav Agarwal
opening
“And there will be an opporhrnity for you to ask questions aftor the presentation concludes.”
Shravan Shah
qa
“In terms of the CAPEX then last time we mentioned tlris yoar around 1,700 odd crore and next year 1,100 crore' so now in the second half how much in the next year and maybe in FY25 you canbroadlyguideintermsoftheCAPEXanddebtlevelpreviouslylvernentionedthatinterms of the dobt 3,300, 3,400 crore that we look at' so how do we see that?”
Management
qa
“So,CAPEXthisyearwillbenowincreasedtol,g00croresinnextyearalsowillbel,400crores looking to the investrnent in these grintling units and we have already done this year like around l,000ororesinthePannaexpansionplusthenormalCAPEXsol,200croreshavealreadybeen spentandasregardstheborrowingwehaveachievedthepeakborrowinglwelbyMrchorsay Jurrenextyearandthatwillremainbecausewewilltakesomefreshbonowingsforthese grinding units, but repayments will be there' So' peak level will remain at that level'”
Management
qa
“so post this Panna once it will become fully operational so sffucturally can we se'e in terms of the lead distance can signifioantly c.m come down by let us say FY25?”
Management
qa
“So, lead distance will come down once the Panna is firlty operational because some of the markets this will help us we will save some markets will be set from Panna' So, we are expecting that there should be an overall reduction in the lead distance after Panna comes in aild after the new grinding units evon at Ujjain.”
Keshav Lshoti
qa
“So,justwanttoundentandthisquarterUAEperformancehasimprovedsowhathasledtothis performance and how should we see the UAE business going forward?”
Management
qa
“one last question from my side earlier you have guided for l0% volume growth in FY23 still it holds same guidance?”
Management
qa
“Yes that we have alreacly we have avolume grorvth of first 6 months in the same region and we expect that to continue.”
Management
qa
“No after taking all that the clinker capacity will be 14' l million ton right?”
Management
qa
“It will be close to 14.5 million tons and Amit if you see the overall because capacity the actual production remains in the range of say 85% to 90o/o ofthe capacity so that will meet our thought ard as a part of our ESG initiatives we are continuously working on reducing the clinker factor also.”
Q&A — 6 exchanges
Q
Sir the first question is on the pricing front on the gray realizations we are seeing close to 6'87o QoQdeclineinthisquarter,myspecificreasonwhythedeclines@mstobesliglrtlyonthe lrighersideversusthepeersandpostSeptemberhowdowoseetheinoreasehowmuchincrease we have seen in our regions where we operate? So,ifyoulookattheprioingseomoretheprioingintheNorthhasbeenunderpressureas compared to other regions' Since major of our exposure is in the North wo are seeing a nrargirrallyhigherdipintherealizations.AsregardspostSeptembertherehasbeensomeprice increase in the Southern region and the western region.
Shravan Shah
Now,ourPannawouldbestartingso2MTPAwestartedandrostolinkerand2MTPAwillbe startingbythisquarter,sohowdoweseeintermsofthevolumefronrthis4MTPApartioularly in third and fourth quarter and the nextyear in terms of the rarnp up? f,JKCur t-t..'i P rn,tttpGaprtar JK Cement Ltd. Ltd. November 14,2022 we have already planned the ramp up and as a part of the existing we had opened up the various markets which are to be served from Panna and started supplying those markets from North. So, partoftlrevolumesNorthalsoincludedsomesalesintlreNortlrofParrrramarketsandweare hopefulthatwewouldbeabletormrpuptlrisca
Q
So,justwanttoundentandthisquarterUAEperformancehasimprovedsowhathasledtothis performance and how should we see the UAE business going forward?
Management
There is marginal improvement in the uAE perfornoance in this quarter and going forward we are hopeful of improved performance on account of the various initiatives that we have taken by settingupthefacilitiesintheAfricaandtappingtheAfricanmarket.so,becarrseoftheCoVlD actually all those efforts could not fructify and now we are hopeful that in the coming months those things are on traok, demand is good and we are able to supply also now because in the previousquartersbecauseoftheveryhighcorrtainerfreightandallwewerenotabletofeedthe demand was there. So, this is something positive about the UAE
Q
Just on the capacity expansion announcemont so with this 5.5 million ton expansion our capaoity will increase to close to around lthir*.24.2million tons whereas the clinker will be like 14'1 million tons so that implies about l.7x cement clinker ratio and oapacity whereas on volumes our ratro is I believe 1.5 to 55x, so how do we kind ofreconcile this gap is there a plan to add a further clinker capaclty later on as well or do you think you can reach that kind of a blending ratio in terms of volumes? No see we can reaoh because we havo run an upgradation in the kiln capaclty at Nimbahera and a
Amit Murarka
NowthatweareclosetocommissionofPannalikebywhenyouthinkwecanachieveoptimal utilization of let us say 7 5t/o, 80% of that plant? It is a Greenfield plant it will take two ysars because trade market we are broadly working on the trade market it takes timo as it happe[s the fust year of operations of ovory plant is around f, JKCtrrN*fiti.P PhillipCapital JK Cement Ltd. Ltd. November 14,2022 50%, 55% so tho firstyear of full oporations would be in that region may be we can reach up to 60% if we are very successful, but it would be we will not give any picture that in first year and yes by end of se
Q
In all probabilities the matter is pending before NCLT, and we have a hearing so we are pursuing it and we are hopeful that within this fiscal the merger shoukl take place. Shravan Sbah Second Karnatak4 Muddapur 20 megawatt wHRS so that would be commissioned by when?
Management
By March 24. Shravan Shah And in terms of this post this on a maintenanco CAPEX you mentioned the 1,900 and 1,400 crore CAPEX for this year and nextyear just fying to undentand in ienns of the FY25 number so maintenance CAPEXwould be 300 crore? It would be in the range of 300 crores. And in terms of the rupees basis fuel consumption cost last time was 10,000 per ton Kcal you mentioned 2.4, but on rupees basis what was the number for this quarter? f, JKCffrn*r"lt,P PhillipCapital JK Cement Ltd. Ltd. November 14,2022 So, it is 20%. Shravan Shah So, around 12,000? Yes. So, anything you want to me
Q
Sir I just have a one question regarding the cash flow from operafion our cash flow from operahon in the standalone is around 1.46 billion while in the consolidated it is around 2.8 billion, so there is a difference of around 1.9 billion, can you throw some highlights like what is leading the later difference beoause in the- last year during the same period the difference was not as high as compared to this year?
Management
You check the number I think the difference should be on account of the inves0nent in fte Panna which we have done from JK Ce,lnent which is to the tune of 200 crores in this quarters' Mudit Agarwal But that should be in the CAPEX part sir I was asking about cash flow from oporations? f, JKcff rJ']# ntiP phiuipcapitar JK Cement Ltd. Ltd. November 14,2A22 We will cheok and revertto you the numbers' Tejas Thank you. The next question is from the line ofTejas from Citigroup' Please go ahead' In oarlier calls you had mentioned that there are some additional mafteting expenses because you are servi
Q
Sir, I had just one question that you have earlier mentioned ftat this 3'5 Greenfield expansion thatyouhavearrnouncerlatUjjainandPrayagraj,soyousardthatitwouldhaveasufficient clirrker that you will be able to supply in the cfinker rmit would operate at 80%, 85% utilization' but still wanted to have some ideathat at Panna we have like 2'5 million tons of clinker capacity currently which would like go and increase to 3.2 and we aro announcing 3'5, so how are we going to manage the 3'5 incremental? ffiJKc#rn#nf, P pCapita Ph JK Cement Ltd. Ltd. November 14,2022
Management
Panna expansion is not 3.5, Panna expansion is only 2 million tons further expansion. The Ujjain grinding of 1.5 million will come from the existing plant because Uiiain is spreacl from Nimbahera, Mangalwar and not from Panna. So, it will come from Nimbaher4 Mangalwar and the UP front will be service from where? The Hamirpur will be serviced from Panna and Prryagraj also will be serviced from Panna. Thank you. As there are no furdrer questions I nolv hand the conforence back to Mr' Vaibhav Agarwal for closing comments. Over to you, Sir' Thank you very much. On behalf of PhillipCapital I would
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Speaking time
Management
27
Shravan Shah
9
Moderator
8
Vaibhav Agarwal
2
Amit Murarka
2
Yash Patil
2
Ajay Kumar Saraogi
1
The majorhighlights
1
Keshav Lshoti
1
Mudit Agarwal
1
Opening remarks
Vaibhav Agarwal
Ladies and gentlemen, good day and wolcome to the Q2 FY23 ard Hl FY23 Call of JK Cement hostedbyPhillipCapital(India)PrivateLimite,d.Asareminder,allparticipantlineswillbein the listen only nrode. And there will be an opporhrnity for you to ask questions aftor the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "t ' then.0'onyourtouchtorrephone.Pleasenotethattlrisconferenceisbeingrecorded, InowhandtheconferenceovertoMr.VaibhavAgarwalfromPhillipCapital(India)Private Limited. Thank you and over to you Sir' Thank you Steve. Good evening, everyone. on behalf of phillipcapital (India) Private Limited, IwelcomeyoutotheQ2FY23andHlFY23CallofJKCementLtd..onthecall'welravewith us Mr. Ajay Kumar Saraogi -Deputy Managing Director and CFO' Mr' Sumnesh Khandelwal -DeputyCFoandMr.PrashantSeth-President@usinesslnformatiorrandlnvestorRelations). IwouldliketomentiononbehalfofJKCementLtd.andanditsmanagementthatcertain statern€nts stateme
Ajay Kumar Saraogi
ThankyouVaibhav.GoodeveningandwelcometoQ2results.Theboardofdirectorsmeton l2th of November to review the working of the results for the Qurter entled 30th Se'ptember 23 and for halfyearly and then Septernber 22'
The majorhighlights
TherevonuefromoperationsduringthisquarterwasZ,ll}croresasagainstl'836croresan increaseoflT%,otherincomewaslowerat23croresasagainst43crores.Theoperating expenses were higher by 22o/o atl,846 crores as against 1'507 crores' Theprofitbeforeta)(was16Tcroresasagainst24gcrores.Theprofrtafterta:(wasl35crores asagainst16gcrorosadropof'26Vo.TheEPSwasRs.16,16paisaasagainstRs.2l.85paisa. TheEBITDAduringthisquartgrwas303croresasagainst35gcroresinthepreviousyear' EBITDA margins was 14.49% as against 19 95% last year' Ifyoulookattheperfonmanceforihe6montlrsApriltoSepxembertherevenuefromoperations hadinoreasedby24Yoat4,3[scroresasagainst3'46gorores.Theotherinoomewaslowerat45 fr J Kctr rn # nt iP Phiuipcapitat JKCement Ltd. Ltd. November 14,2022 crores as against 75 crores. The operating expenses lvas higher at32o/oat 3,61 I as agutstzJ4l crores. The EBITDA was 707 crores as against 761 crores. The profit after tax was 306 crores asagainst3TTcrores.TheEPSforthe6monthswasRs.3g.60paisaasagairrst4S.4S.Th
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