JK Cement Ltd. share price target

Recommendation: We maintain our BUY recommendation on the stock and revise our estimates for FY23 and FY24 impacted by higher cost.

JK Cement’s (JKCE) Q3FY23 EBITDA at Rs2.6bn (down 29% YoY) was below our / consensus estimates. Blended realisation dipped ~1% (YoY and QoQ), while total cost/te rose 9% YoY (2% QoQ). This led to decline in blended EBITDA/te by 40% YoY (18% QoQ) to Rs669/te (I-Sec: Rs896/te).

We maintain our BUY rating on the stock and value it at 13x FY24E EV/EBITDA to arrive at a target price of Rs 3,350/share (unchanged), implying an upside of 14% from the current levels.

The stock is currently trading at 17x/12x FY23E/FY24EEV/EBITDA. We value JKCL at 13x FY24E EV/EBITDA to arrive at a TP of Rs 3,350/share (Rs 3,020/share earlier), implying an upside of 14% from the CMP and maintaining our BUY rating on the stock.

JK Cement’s (JKCE) Q2FY23 EBITDA at Rs3bn (down 16% YoY) was above our / consensus estimates of Rs2.5bn led by lower costs and better volumes.

We recommend a Buy the stock for a target price of Rs 2920/ implying an upside of 10% from CMP