J.K. Cement's (JKC) 3QFY16 operating performance was ahead of expectation as EBITDA came in at Rs1.25bn (+28% yoy) v/s expectation of Rs1.12bn. EBITDA/ tonne (blended) came in at Rs623 v/s Rs565 and Rs582 reported in 3QFY15 and 2QFY16, respectively. Notably, grey cement EBITDA/tonne remained subdued and stood at Rs257 as against Rs244 in 3QFY15. We continue to believe that possible improvement in utilizations in Southern plants and likely price recovery in Northern markets are key catalysts to improve grey cement operating performance. Further, possible deleveraging of balance sheet from FY17E will aid it to gain further traction...