Buy J K Cement; target of Rs 5150: Motilal Oswal

Motilal Oswal's research report on J K Cement

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. The impact of lower grey cement realization was offset by - 1) higher other operating income; and 2) lower other expenses. OPM surged 2.6pp YoY to 17.3% (est. 16.3%). Adj. PAT increased 49% YoY to INR1.9b (est. INR1.5b).Management highlighted its long-term capacity expansion plan of 45-50mtpa (vs. 24mtpa currently), including the greenfield expansion at Jaisalmer, followed by brownfield expansions at Muddapur (Karnataka), Panna (MP), and Orrisa plants. JKCE reiterated its cost-saving target of INR150-200/t over the next two years through logistics cost optimization and the increasing share of green energy and alternative fuel.

Outlook

We broadly maintain our FY25/FY26E EBITDA. We prefer JKCE due to its steady expansion and stronger execution strategy vs. peers. We value JKCE at 15x Jun’26E EV/EBITDA to arrive at our TP of INR5,150. Reiterate BUY.