JK Cement Ltd. share price target

The company has successfully commissioned 0.7 million tonne per annum grey cement grinding capacity at JK Cement works Balasinor, Gujarat and also commenced commercial despataches on 8th October,2020. This expansion takes the total grey cement capacity of the company to 14.67 million tonne

The company recorded healthy operating performance despite lower volume driven by savings in variable cost. Although Revenue/Ebitda/PAT degrew by 28%/31% and 60% on consolidated basis YoY on account of COVID-19 related lockdown, it recorded healthy EBITDA margin of 21.2% in line with our expectation

Commissioning of new capacities to fuel growth Out of total capex plan to set up new 4.2 MT capacity, JK Cement has commissioned 3.5 MT cement capacity while commercial dispatches also resumed in the quarter. Newly added capacities include 1 MT grinding unit (GU) each in Nimbahara, Mangrol along with 2.6 MT clinker plant and 1.5 MT GU in Aligarh. The company is also adding 0.7 MT GU in Gujarat (Balasinor), which will take its total capacity to 14.7 MT, a rise of 40% in capacity. Thus, despite a challenging FY21E, we expect it to clock volume CAGR of 12.6%...

Background: 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 0.6MTPA (second only to UltraTech). The company also manufacturers putty and has an installed capacity of 0.7MTPA. The company also has plants in Fujairah (UAE) with an installed capacity of 0.6MTPA (white cement) and 1.02MTPA (grey cement) in a 90:10 JV with the Government of Fujairah. It has also expanded its grey cement capacity by 3 MTPA through two split grinding units (1.5 MTPA...

2 September 2020 J K Cement (JKCE)s 1QFY21 result highlights market share gains for the company, led by ~50% capacity expansion in North India. While we raise our FY21E EPS by 10% to factor lower fixed costs, our FY22 estimates are largely unchanged. We reiterate on a 17% EPS CAGR over FY2022E, driven by capacity-led volume growth. 1QFY21 revenue/EBITDA/PAT at INR9.7b/INR2.2b/INR0.8b was down 27%/ 29%/ 49% YoY and was +2%/ +29%/ +57% against our estimate. Volumes declined for grey cement (incl. Total volumes fell 24% YoY to on a higher proportion of grey cement (90% v/s 85%) in the sales mix. Total cost per ton declined 4% YoY (flat QoQ) to INR4,245/t and was 6% beat on our estimate due to a 27% YoY fall in other expenses from lower fixed overheads. However, decline was partly offset by negative operating leverage and the consumption of higher cost petcoke inventory.

JKCE posted muted set of numbers with 27.3%/ 29.1%/ 49.5% YoY degrowth in revenue/ EBITDA/ PAT to Rs9.6 bn/ Rs2.2 bn/ Rs777 mn in Q1FY21 due to 5.1% YoY de-growth in blended realization (-1.4% QoQ) coupled with 23.5% YoY decline in blended volume to 1.77 mt. We expect 10.5%/ 81%/ 0.7% revenue/ EBITDA/ APAT CAGR over FY2022E led by 6.6%/ 13.8% blended volume growth and (1.2%)/ 1.7% blended cement realization growth in FY21E/ FY22E. We increase our revenue and APAT estimates by 9.6%/ 5.1% and 24.9%/ 8.2% for FY21E/ FY22E factoring Q1FY21 results. We broadly maintain our EBITDA margin estimates. We like JKCE because of its...

A leading cement manufacturer in the country, JK Cement Ltd is an affiliate of the multi-disciplinary industrial conglomerate JK Organization, which was founded by Lala Kamlapat Singhania. The Company has over four decades of experience in cement manufacturing.

JK Cement in its FY20 annual report, highlights about growing together and staying ahead of the curve. JK Cement has posted a strong all round performance in a challenging year and a challenging external environment that was dampened by the Covid-19 pandemic. The company was able to demonstrate such growth driven by resource efficiency, expanding capacities, growing prominence across urban and rural markets. The company continuously improves resource efficiency in clinker and cement production process by optimizing energy usage, utilizing generated waste...

We initiate coverage on JK Cement Ltd with a BUY recommendation and a Target Price of Rs 1697, which implies 19% upside from the current levels.

Background: 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 0.6MTPA (second only to UltraTech). The company also manufacturers putty and has an installed capacity of 0.7MTPA. The company also has plants in Fujairah (UAE) with an installed capacity of 0.6MTPA (white cement) and 1.02MTPA (grey cement) in a 90:10 JV with the Government of Fujairah. It has also expanded its grey cement capacity by 3 MTPA through two split grinding units (1.5 MTPA...