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. EBITDA miss was led by higher-than-estimated opex/t (+3% vs. est.) and lower sales volume (-2%/10% miss on grey/white cement volume vs. est.). OPM surged 5.5pp YoY to 18% (est. ~19%). Adj. PAT (adjusted for reversal of provision of INR95m) stood at INR2.1b (est. INR2.4b).The management highlighted a potential cost reduction of INR150-200/t over the next two-three years. This was primarily be driven by savings in logistics, power and fuel, and other fixed costs. Further, the capacity expansion plan at Panna (clinker line – II having capacity of 3.3mtpa) and grinding capacity of 1.1mtpa is on track, which is likely to be commissioned in 2QFY26.
OutlookWe largely retain our FY25/FY26 EBITDA estimates. We prefer JKCE for its steady expansion and strong execution strategy vs. peers. We value JKCE at 15x FY26E EV/EBITDA to arrive at our TP of INR5,300. Reiterate BUY.
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