ICICI Direct is bullish on JK Cement has recommended buy rating on the stock with a target price of Rs 1265 in its research report dated May 17, 2017.
ICICI Direct's research report on JK Cement
The company sells majority (~75%) of its cement production in the north, which has witnessed robust volume growth led by an increase in infrastructure spend by the government (especially in road sector) thereby helping it maintain healthy utilisation.
Further, adjusting for white cement valuation, the company’s grey cement is trading at an EV/tonne of US$90/tonne (vs. replacement cost of US$150/tonne). Hence, we believe there is significant upside potential. We maintain our BUY recommendation on the stock with a revised target price of Rs 1265/share (i.e. at 13x FY18E EV/EBITDA, $137/tonne on FY19E capacity of 12.9 MT).
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