JK Cement expands capacity to support sales volume

JK Cement is increasing capacity by 3Mta through two split-grinding units of 1.5Mta each in Haryana and Rajasthan in the northern region, lifting its grey cement capacity to 10.5Mta. The projects are expected to be completed by June 2014 and should help in realising higher volumes.

At present, 2QFY14 results are expected to be subdued due to lower volumes and cement prices. Grey cement volumes are forecast to decline 10 per cent as the company’s southern plant noted a 30 per cent drop in dispatches. Grey cement volumes in July and August fell by 10.7 per cent YoY. As sales volumes and prices fall, research house Equity Bulls forecasts a 45-50 per cent fall in operating profit during the second quarter.