FEBRUARY 2013
Disclaimer
 No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness
or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current
after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may
be "forward looking statements" based on the currently held beliefs and assumptions of the management of J. K. Cement Limited
(“Company” or “JKC”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s
general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its
competitive and regulatory environment.
 Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results,
financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial
condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or
developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past
performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are
cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these
forward-looking statements to reflect future events or developments.
Strictly Private & Confidential
 This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational
needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any
jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision
or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United
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 This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.
Strictly Private & Confidential
2
Indian Cement Industry: Sustained Demand Growth
India, the 2nd largest cement producer in the world with total installed capacity of 350 mn tonnes
Source: CMA
 The Cement industry has witnessed secular growth in consumption with quarterly variation in a year
 The momentum will sustain and gather further steam, driven by:
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Demand growth - 8% (FY13) & 10% (FY14-FY15)
•
Expected interest rate cuts in 4QFY13 positively
impacting demand from housing, infrastructure
and industry segments
•
Multiple state/general elections in the next 18
months
•
The government’s focus on reviving investment
demand
•
Positive outlook on the Rabi crop rubbing off on
rural housing demand.
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Source: Company Estimates
3
Expected Slowdown in New Capacity Addition will
Improve Utilization of Current Capacity
 In the current economic and political scenario, setting
up a new Greenfield project has become challenging
in view of the following:
•
Long arduous
approvals
process
of
 With strong volume growth and decline in pace of
capacity addition, utilization (%) will improve,
having bottomed out in 2H CY11
environmental
Land acquisition
•
Complexity of mineral composition in new areas
•
Supporting infrastructure of rail connect and
water availability
•
Greenfield project cost in current context is $135$150/ton, depending on the site location
•
Most regions will operate at 90%+ utilization
except Andhra Pradesh, which has capacity
overhang
Capacity Utilization to improve from FY13 onwards
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•
 The average utilization will be 80% going ahead
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Source: Company Estimates
4
Prices will Continue to Remain Robust Resulting in
Improved Profitability
 An annual increase of INR 20-25 / bag is expected,

considering:
50% of India’s installed capacity has come up in
last 5 years
•
• Improvement in demand growth
• Pass-on of cost-push
This relatively new capacity requires an
EBITDA/ton of Rs.1,000 – 1,100 to justify
equity returns
• Increase in capital costs

• Slowing capacity addition
 The rising costs of power, fuel and freight are likely to
At the current Replacement Cost and Variable
cost levels, an increase of Rs.20-25/bag is
necessitated to earn new capacities 15% RoCE
stabilize, although at slightly elevated levels
A significant improvement is seen in EBITDA/ton
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from the trough levels of ~INR525/ton in 2HCY10.
The EBITDA/ton is likely to be ~INR1034/ton in
FY13 and INR 1,184/ton in FY14 (v/sFY12 average of
INR 850/ton).
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Source: Company Estimates
5
Company Background

J. K. Cement Ltd. (“JKCL” or “Company”) is part of the $3 billion conglomerate,
JK Organisation. The company is promoted by Dr. Gaur Hari Singhania & Mr.
Yadupati Singhania and entered cement business in 1975

2nd largest white cement manufacturer in India with 0.40 MTPA capacity and one
of the leading grey cement producers in North India with over 36 years of
experience.

Highly reputed brand with extensive nation-wide distribution

Integrated Cement manufacturing company with 7.5 MTPA grey cement capacity
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

•
Nimbahera, Mangrol and Gotan (Rajasthan): 4.5 MTPA
•
Muddapur (Karnataka): 3 MTPA
•
105.5 MW of Captive power
•
Proximity and access to large high quality reserves of limestone, sufficient to
operate cement plants for the next 30 years.
Expanding domestic grey cement capacity to 10.5 MTPA and white cement
capacity to 0.60 MTPA and wall putty capacity to 0.60 MTPA by Sept 2014.
•
Mangrol (Rajasthan): 1.5 MTPA
•
Jhajjar (Haryana): 1.5 MTPA split grinding
•
Gotan (Rajasthan): 0.20 MTPA white cement and 0.30 MTPA wall putty
Greenfield Expansion in the Middle East
•
Fujairah (UAE): Dual process plant - 0.6 MTPA white cement or 1.0 MTPA
Grey cement

JK Cement’s LT credit rating was recently upgraded to AA- by CARE Ratings

StrictlyExchange
Private & Confidential
Listed on National Stock
(“NSE”) and Bombay Stock Exchange
(“BSE”) with a market capitalization of INR 23bn
6
Key Highlights
 Cement Sector on Strong Foundation with Positive Future Outlook
•
Sustained demand coupled with slowdown in capacity addition resulting in higher capacity utilization
•
Improvement in profitability, backed by higher cement prices and operating margins
 Integrated manufacturing facilities at multiple locations
•
Plants in North & South India enable the company to serve multiple regions
•
105 MW of captive power and large limestone reserves at close proximity, sufficient for the next 30 years
 White cement business cash cow with strong growth and profitability
•
White cement & wall putty segments contribute consistently to profitability and provide healthy margins & stable cash
flows
•
White cement capacity to increase from 0.4 mtpa to 0.6 mtpa by Sept ‘14 and augment current market share of 40%.
•
Wall putty capacity will increase from 0.3 mtpa to 0.6 mtpa, in phases during next two years
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 Domestic expansion to consolidate leadership in North and improve operating efficiencies
•
Expansion plan to tap new markets, increase market share in North India and derive benefit from VAT incentives for
entire production at Mangrol and Haryana
•
North based plants operating at 90%+ and newer plants will offer better operating efficiency
•
Increase in share from south plant, which serves higher realization markets, will improve margins
 Dual process plant in UAE to grow internationally
•
Cater to white cement demand in Middle East & North Africa(MENA) and infrastructure development projects in Qatar
•
Strictly
Private &and
Confidential
Unit in UAE provides logistical advantage to serve GCC and MENA
countries
frees up current export quantity from
India for domestic sale
7
Corporate Milestones
Grey Cement Capacity Build-up
10.0
3.0
8.0
6.0
4.0
2.8
0.8
FY '04
FY '05
0.5
10.5
3.0
Dec 2012
Company’s long term credit rating
upgraded from A+ to AA- by CARE Rating.
Nov 2012
“Best Employer Award - 2011” from Employer’s
Association of Rajasthan
Foundation laying ceremony for setting up a split
grinding unit at Jhajjar, Haryana
0.5
7.5
2.0
0.0
FY '07
FY '09
FY '10
FY '15E
Oct 2012
Foundation laying ceremony for brownfield expansion at Mangrol
July 2012
“National Award for Excellence in Cost Management – 2011”
from The Institute of Cost Accountants of India
Nov 2011
Foundation laying ceremony at Fujairah to set up dual process plant
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Sept 2009
Commissioned a 3 mtpa Greenfield plant in south at Muddapur, Karnataka
2007
 Enhanced grey cement capacity by 0.50 mtpa, set up a 20MW coal based power plant and
13.2MW of heat recovery based power plant at Nimbahera and enhanced white cement
capacity by 0.1 mtpa at Gotan, through IPO proceeds
 Acquired a 0.1 mtpa white cement unit at Gotan from Nihon Nirmaan and subsequently in
2009, converted the unit to produce 0.47 mtpa grey cement
March 2006
Successfully raised INR 2960 mn through the Follow on Public Offer (“FPO”)
June 2005
The Company got listed on the Bombay Stock Exchange (“BSE”)
Nov 2004
Acquired a cement division from its affiliate through slump sale, on a going concern basis, with
a capacity to manufacture 3.55 mtpa of grey cement and 0.3 mtpa of white cement along with 15
MW of captive power plant
May 1975
Entered cement business with 0.3 mtpa plant at Nimbahera, becoming one of Strictly
the first Private
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enter the cement business
8
Existing Plant locations and Market Reach
Gotan - Nagaur (Rajasthan)
 0.47 MTPA# :Grey Cement
 0.40 MTPA* :White Cement
 0.3 MTPA: Wall Putty
 7.5 MW: Thermal Power Plant
Nimbahera – Chittorgarh (Rajasthan)
 3.2 MTPA : Grey Cement
 20 MW:Thermal Power Plant
 13 MW: Waste Heat Recovery
 15 MW (Bamania): Thermal Plant
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Mangrol - Chittorgarh (Rajasthan)
 0.75 MTPA - Grey Cement
Cement Plant
Muddapur - Bagalkot (Karnataka)
 3 MTPA: Grey Cement
 50 MW: Thermal Power Plant
Power Plant
Market Reach
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# The grey cement capacity is interchangeable with white cement
* The white cement capacity is being expanded to 0.60 MTPA
9
Pan-India market
reach in white
cement & presence
in 13 states for grey
cement. 105.5MW of
captive power and
abundant limestone
reserves
Strengths
• Plants in Rajasthan & Karnataka
gives wider market reach covering
North, West & Southern regions
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• JK’s white cement & wall putty are
marketed and sold across the
country
MultiRegion
Presence
Superior
Product
Mix
Abundant
Limestone
Reserves
Captive
Power
• JK Cement has access to large
reserves of high-quality limestone,
adjacent to the manufacturing
facility, estimated to suffice for 30
years at current production
capacity
• Superior product mix as one of
only 2 producers of white cement
in India.
• White cement & wall putty
segment contribute ~25% of top
line, providing stability in cash
flows and superior margins
• Over 100 MW power generation
through coal-based & waste heat
recovery plants
• Total power requirement met at
lower cost through captive
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generation
10
Established Brands
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Grey Cement
Ordinary Portland Cement (OPC) is sold under
the J.K. Cement brand name, Sarvashaktiman
Portland Pozzolana Cement (PPC) and Portland
Slag Cement (PSC) variants are sold under the
J.K. Super Cement brand name
White Cement
Value Added Products
J.K. White Cement is marketed and distributed
across the country
White cement based Wall Putty and Water Proofing
Compound
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11
Superior Product Mix on account of White Cement
White Cement Industry in India
 Installed Capacity: 1.0 mtpa
 Only 2 producers – UltraTech
Cement & JK Cement
 Domestic Sales: 0.9 mtpa
 Export Quantity: 0.1 mtpa
 Key Export Markets: South-Asia,
Middle East & Africa
Growth Drivers
White cement growing at 10%
annually and expected to increase on
account of:
• Increase in per-capita consumption
• Demand
from
wall
putty,
registering 30% annual growth
• Increase in demand for Housing
sector
JK White Cement
 Current market share: 40%
 Pan-India
reach
established brand
with
 White cement contributes ~25%
to
revenue
&
~30%
to
profitability
 Sufficient to service interest
liability & tax payout of the
entire company
Price Realization (INR/ton) – Grey vs White*
 Entry of new players remote as:
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 Requirement of Special quality
limestone
 High investment costs
 Problems in mine allocation
* White cement price including wall putty
White cement provides J.K. Cement with superior product mix and unique position to leverage
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on high-growth, superior margin segment
12
Advantageous Revenue & Market Mix
Increasing share of White Cement in Revenues
120%
100%
White Cement (Inc Putty)
14%
18%
19%
Product Mix – Grey Cement (FY12)
Grey Cement
21%
PSC, 2%
22%
80%
OPC,
39%
60%
40%
86%
82%
81%
79%
78%
FY '08
FY '09
FY '10
FY '11
FY '12
PPC, 59%
20%
0%
Rising share from West & South to improve Realization
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North
South
West
Market Mix evenly distributed (FY12)
Central
Delhi
6%
100
19.7
17.7
16.6
19.4
14.2
17.8
80
60
49.4
Rajasthan
19%
MP
8%
40
20
Punjab Others
6%
4%
Westen U.P
12%
45.1
Karnataka
12%
0
FY12
Strictly Private &
1HFY13
13
Haryana
18%
Maharashtra
Confidential 15%
Strategy
Poised to be among top 5 white cement
producers globally
Increasing white cement and wall putty capacity
to sustain present share of revenue from this
business
Consolidate
position in
white cement
 Dual process plant in UAE
to cater to growing markets
of Middle East & Africa
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 Infrastructure development
demand in Qatar for soccer
world cup
New
Domestic
Markets
International
Opportunities
STRATEGY
Energy
Efficiency
All plants enjoy proximity to
raw material & growth markets
Brown field expansion
Split grinding in Haryana for
logistical advantage in National
Capital Region
Brand
Visibility
 Captive power generation to provide long
term sustained source of low cost power at
fixed rate
 A leading brand in North for Grey Cement.
JK White and JK Wall Putty are marketed
across the country
 Use of waster heat recovery to reduce
environmental impact
 Enhance visibility further through print &
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& Confidential
online
media and consumer promotions
14
Expansion Plan
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Domestic – Rajasthan & Haryana
Fujairah, UAE
Nature
Brownfield
Greenfield- In a subsidiary, held 90% by JK Cement
along with Govt. of UAE (10%)
Capacity
3.0 mtpa, with 1.5 mtpa grinding in Mangrol & 1.5 mtpa
split grinding at Jhajjar, Haryana
Dual process cement plant capable of producing 0.6
mtpa white cement or 0.9 mtpa grey cement
Commissioning
 Haryana: June ’14
 Mangrol: Sep ’14
Mar ‘14
Features
 Abundant land
 Captive thermal plant of 25 MW and 9 MW WHR
 Railway siding at both locations
 Connectivity to road & port
 Quality limestone reserves
 Flexibility to switch between white & grey cement
Capital Outley &
Funding Mix
Total project cost: Rs. 1734 Cr.
Debt: Rs.1200 Cr.
Equity Contribution: Rs. 534 Cr.
Total project cost: Rs. 765 Cr.
Debt: Rs. 510 Cr.
Equity Contribution: Rs. 255 Cr
Tied-up
Proposal moved to banks and in the process of tie-up.
Company also has sufficient internal resources for
equity financing
Financial closure achieved for debt portion. Loan of
Rs.150 Cr. for promoter contribution and Rs.95 Cr. of
own resources remitted
Project Status




 Civil & mechanical work progressing on schedule.
 60% of the RCC work completed till date
 Erection of equipment has commenced
Target Market
Haryana unit provides logistical advantage to serve the
Cater to Middle East and North African white cement
National Capital Region and helps consolidate JK’s
demand and infrastructure development projects in
leadership position in the North.
Qatar
for soccer
world cup
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Private
& Confidential
Entire land acquired at both locations
Mining lease allotted for additional limestone mine
Civil work has commenced
Orders placed for equipments with renowned vendors
15
Past consolidated financials
Income Statement Highlights
INR mn
Operating Income
FY '10
FY '11
FY '12 H1FY13
INR mn
FY '10
FY '11
FY '12 H1FY13
699
699
699
699
Reserves & Surplus
12,786
13,250
1,4522
15,762
18,268
20,943
25,468
14,483
Other Income
193
299
469
287
Total Income
18,461
21,243
25,936
14,770
Networth
13,486
13,949
15,221
16,461
Total Operating Expenses
13,891
18,180
20,329
11,623
Long Term Loans
10,138
10,584
9,965
9,455
4,570
3,063
5,608
3,147
Total Borrowings
10,737
11,183
10,808
10,618
Interest
616
1,185
1,443
665
Deferred Tax Liability (net)
1,858
2,109
2,291
2,436
Depreciation
855
1,128
1,256
633
Other Liab & Provisions
3,579
6,746
7,440
8,402
-
(72)
78
-
22,822
23,996
24,071
23,997
3,098
823
2,830
1,850
48
42
92
1,483
853
196
1,085
620
Cash & Cash Equivalents
1,318
3,215
4,332
3,445
2,246
626
1,746
1,230
Other Assets
5,473
6,734
7,264
8,993
EBIDTA (B’fore Excep. Items)
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Balance Sheet Highlights
Exceptional Item
PBT
Provisions
PAT
Equity Share Capital
Net Fixed Assets (Incl CWIP)
Investments
Note: H1FY13 numbers are on standalone basis.
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16
Latest Quarter Performance
Particulars
INR million
Q3 FY13 Q3 FY12 Change
(%)
Dec 31, Dec 31,
Y-o-Y
2012
2011
9M
9M
Dec 31,
2012
Dec 31,
2011
Change
(%)
Y-o-Y
FY 12
Mar 31,
2012
Total Operating
Income (Net)
6880.8
7148.7
- 3.7%
6880.8
6158.9
11.7%
21404.1
17373.8
23.2%
25467.8
EBITDA
1348.8
1316.8
2.4%
1348.8
1204.0
12.0%
4249.6
3138.8
35.4%
5166.3
PBT
775.6
830.1
- 6.6%
775.6
645.7
20.1%
2625.2
1437.1
82.7%
2857.8
PAT
543.8
540.9
0.5%
543.8
435.2
25.0%
1773.5
969.8
82.9%
1773.3
7.78
7.74
7.78
6.22
25.36
13.87
25.36
Raw Material Cost %
15.3%
13.1%
15.3%
12.1%
13.6%
12.4%
12.2%
Power & Fuel Cost %
24.8%
24.4%
24.8%
25.3%
25.1%
26.5%
25.7%
Freight Costs %
20.5%
20.4%
20.5%
19.3%
20.0%
19.5%
19.1%
Others %
19.8%
23.7%
19.8%
23.8%
21.5%
23.6%
22.8%
EBITDA %
19.6%
18.4%
19.6%
19.5%
19.8%
18.0%
20.2%
7.9%
7.5%
7.9%
7.0%
8.2%
5.5%
6.9%
EPS – Basic & Diluted
Strictly Private & Confidential
Q3 FY13 Q2 FY13 Change
(%)
Dec 31, Sept 30,
Q-o-Q
2012
2012
PAT %
 During 9MFY12, Company’s revenue grew by 23.2% as compare to the corresponding period 9MFY11.
 During 9MFY12, Company’s EBIDTA margin improved by 1.8% primarily on account of reduction in power &
Strictly Private & Confidential
fuel cost and other expenses.
17
Management
Board Of Directors
Experience
Gaur Hari Singhania
Chairman
Raghavpat
Singhania
Special Executive
5 years
Yadupati Singhania
Managing Director and CEO
Madhavkrishna
Singhania
Special Executive
2 years
K.B. Agarwal
Independent Director
A K Saraogi
President (Corp. Affairs) & CFO
25 years
M. P. Rawal
President (Tech. & Mgmt Service)
37 years
D Ravisankar
President (Projects)
35 years
R. C. Shukla
President (Mktng, Grey Cement)
28 years
Mohan Sharma
Head (Mktng, White Cement)
24 years
Kaustubh
Dadhich
Head (Mktng, South-West)
25 years
B. K. Arora
President (J.K. White Cement Works)
34 years
J. P. Bajpai
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Key Management
Independent Director
Suparas Bhandari
Independent Director
J. N. Godbole
Independent Director
Achintya Karati
Independent Director
K. N. Khandelwal
Independent Director
Raj Kumar Lohia
Independent Director
K. K. Jalori
Plant Head, Nimbahera
32 years
Ashok Sharma
Independent Director
A. K. Jain
Plant Head, Muddapur
26 years
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18
Awards & Recognition
9th National Award for Excellence in Cost Management, 2011
(The Institute of Cost Accountants of India)
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Commemorative Stamp in
honor of the Founding Father
Best Employer Award, 2011
Employers’ Association of Rajasthan
Over All Performance Award by
Indian Bureau of Mines
Productivity Excellence Award 2009-10
(Rajasthan State Productivity Council)
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19
Strictly Private & Confidential
Thank You
Strictly Private & Confidential
20