JK Cement Ltd. share price target

We maintain our BUY recommendation on the stock.

JK Cement (JKCE)’s consol. EBITDA grew 19% YoY to INR4.9b (est. INR4.7b), and EBITDA/t increased 14% YoY to INR1,003 (est. INR949) in 1QFY25.

Q4 revenue grew 10% YoY to Rs 29.4bn as grey cement volumes gained 13% YoY/QoQ; realisation resilient YoY with 1% drop

JK Cement’s (JKCE) Q4FY24 EBITDA (of INR 5.48bn, up 51% YoY but down 10% QoQ) stood broadly in line with estimates as sustained drop in variable cost helped offset the operating leverage disappointment (of fixed cost being flat QoQ).

JK Cement (JKCE) consol. EBITDA grew 60% YoY to INR5.6b (est. INR6.1b)
and EBITDA/t increased 44% to INR1,077 (est. INR1,133) in 4QFY24.

We maintain our BUY recommendation on the stock and revise our estimates, taking into consideration lower cement prices.

POWERIND: In-line quarter but valuations overdone; cut to SELL. FY25 Budget Preview: Focus to remain on consolidation. KMB: NIM intact QoQ; higher provisions dull profits. AXSB: Profits subdued despite strong business growth. HAVL: Slow quarter but summer could bring cheer; maintain BUY. KEII: Decent quarter; maintain HOLD. JKCE: Healthy performance but priced in. GLS: Strong margins make up for subdued revenue growth

We maintain our BUY recommendation on the stock.

We recommend a Buy the stock for a target price of Rs 3860 implying an upside of 10% from CMP.

Q2 revenue grew 20% YoY to Rs 25.7bn as grey cement volumes surged 22% to 3.9mt

We maintain our BUY recommendation on the stock.

QoQ margin improvement in a seasonally weak Q2 is rare and JK Cement (JKCE) has surprised on this front with >200bps margin jump. As a result, EBITDA in Q2FY24 stood ~12% ahead of estimate at ~INR4.5bn. Calibrating the upbeat in H1FY24 and firm underlying cement prices in key markets of North and South India, we revise up our FY24E EBITDA by ~6% but keep FY25E largely intact.

we assign a BUY rating to the company, with a Target Price (TP) of Rs 3,560/share, suggesting a potential upside of 12% from the current market price (CMP).

JK Cement’s (JKCE) Q1FY24 performance stood strong, being one of the few cement companies to report a QoQ margin improvement of ~170bps (EBITDA stood 15% ahead of estimates). We see scope for further margin improvement owing to near-term benefits of a) incentives from the new Panna unit (in Madhya Pradesh)

Recommendation: We maintain our BUY recommendation on the stock.

Volume growth healthy including contribution from the new Panna unit that has attained 60% capacity utilisation