JK Cement Ltd. share price target

ICICI Securities Ltd | Retail Equity Research JK Cement's Q2FY17 revenues broadly remained in line with estimates led by healthy growth in white cement sales. While white cement sales grew 15.9% YoY to 0.27 MT, grey segment reported volume growth of mere 3.8% YoY to 1.64 MT due to excessive monsoon in some parts of the south. Further, the company faced some technical issue at its silo in Karnataka that also had a negative impact on cement production On the margin front, EBITDA margins improved 420 bps YoY to 16%...

JK Cements is one of the largest cement players in North India. It manufactures grey cement, white cement and white cement based wall putty. Currently the grey cement capacity is 10.5MTPA. Domestic white cement capacity is 0.4MTPA (second only to UltraTech, which has capacity of 0.55MTPA). The company also manufacturers putty and has an installed capacity of 0.3MTPA. The company has also installed a grey cum white cement plant with an installed capacity of 0.6MTPA (white cement) and 1.02MTPA (grey cement) in Fujairah (UAE) in a 90:10 JV with the Government of Fujairah. It has also expanded its grey...

JK Cement surprised positively on the margin front during the quarter. While revenue came in marginally lower, increasing 9.2% YoY to | 886.7 crore (vs. I-direct estimate: | 898.6 crore), EBITDA was ahead of our estimates due to sharp fall in power & fuel cost • Blended cement volumes & realisation both increased 4.1% & 4.9% YoY, respectively. Prices in the north remained healthy where the company has 75% exposure of total sales volume. ICICI Securities Limited have revised target price upwards to | 855/share (i.e. at 11x FY17E EV/EBITDA, $115/tonne on FY18E capacity of 11.8 MT),upgrade their rating on the stock from HOLD to BUY.

JK Cement's Q1FY17 Revenues/EBITDA of Rs 8.87bn/Rs 1.66bn were in-line with our estimates of Rs 9.04bn/Rs 1.73bn. Blended volume growth at 4.1% YoY and net realisation improvement of 7.1% were in-line with our estimates. Blended EBITDA/t increased significantly by 88% YoY led by better realisation and lower costs. Going ahead, we revise downwards our EBITDA estimates by 2-5% for FY17E/18E to factor in lower realisation. Valuations look fair at 8.7x FY18E EV/EBITDA post the recent run-up in stock. We downgrade the stock to HOLD with revised target price of Rs 840.

Backed by better-than-estimated jump in average realization of grey cement (+1.5% yoy & +8.7% qoq) and improved operating synergies, J.K. Cement (JKC) has reported a healthy operating performance in 1QFY17 with its EBITDA surging by 95% yoy to Rs1.66bn topping our estimate of Rs1.52bn. Grey Cement EBITDA spiked by ~135% yoy to Rs1.0bn. Notably, raw material cost/tonne jumped by ~5% yoy & ~20% qoq owing to clinker purchase due to breakdown of Silo at Karnataka plant. However, decline in power and fuel cost (-34% yoy & -9% qoq on per tonne basis) and freight cost (-8% yoy & -2% qoq on per tonne basis) led by...

JK Cements is one of the largest cement players in North India. It manufactures grey cement, white cement and white cement based wall putty. Currently the grey cement capacity is 10.5MTPA. Domestic white cement capacity is 0.4MTPA (second only to UltraTech, which has capacity of 0.55MTPA). The company also manufacturers putty and has an installed capacity of 0.3MTPA. The company has also installed a grey cum white cement plant with an installed capacity of 0.6MTPA (white cement) and 1.02MTPA (grey cement) in Fujairah (UAE) in a 90:10 JV with the Government of Fujairah. It has also expanded its grey...

ICICI Securities Ltd | Retail Equity Research JK Cement's results came in below our estimates. JK Cement's Q4FY16 revenues increased 4.2% YoY to | 949.6 crore (below I-direct estimate...

9 Power connectivity at the UAE site is now fully operational and benefits have started flowinginintheformoflowerpowercosts. 9 ExpectitswhitecementbusinessEBITDAtocontinuegrowingat1520%inFY17....

A meaningful demand pickup in Northern markets and production ramp-up from new GUs led to healthy growth in sales volume of Grey Cement to 1.90mnT (+13% yoy & +7.5% qoq), whereas White Cement (including Wall Putty) sales volume stood at 0.28mnT (+19% yoy & +9% qoq). Notably, production ramp-up of new 0.2mnT Wall...

grinding unit). New unit at Mangrol operates at full capacity and the relatively inefficientNimbaheraunitoperationsareinalignmentwithdemand. 9 Fuelpriceshavecorrectedbyanother6%inQ4butfurtherreductionsareunlikely....