Motilal Oswal's research report on J K Cement
J K Cement (JKCE) reported consol. EBITDA of INR4.7b (est. INR4.1b) in 2QFY24, led by higher white cement volume in subsidiary and lower cost. EBITDA/t stood at INR1,029 (est. INR931), and adj. PAT was at INR1.8b (est. INR1.2b) during the quarter. The white cement volume included a one-off big order (~40k ton shipment) to Australia from its UAE subsidiary. JKCE is working to turn around the UAE business, aided by the normalization of operations and moderation in fuel prices and supply chain constraints. Management expects the Central India plants’ profitability to improve further with the stabilization of WHRS and increase in AFR usage.
Outlook
We largely retain our FY24/FY25 EBITDA estimates. We prefer JKCE for its steady expansion and strong execution strategy vs. peers. We value JKCE at 14x Sep’25E (earlier FY25E) EV/EBITDA to arrive at our revised TP of INR3,900 (vs. INR3,640 earlier). Reiterate BUY.
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