Buy J K Cement; target of Rs 6060: Motilal Oswal

Motilal Oswal's research report on J K Cement

JK Cement’s (JKCE) 4QFY25 result was above our estimates, primarily driven by higher volumes (+7% vs. estimate). EBITDA grew ~37% YoY to INR7.6b (+17% vs. estimate). EBITDA/t rose ~19% YoY to INR1,277 (+9% vs. estimate). PAT increased ~69% YoY to INR3.6b (+20% vs. estimate). Management targets to achieve grey cement volume of ~20mt (~12% YoY growth) in FY26. Out of the targeted cost savings of INR150-200/t, the average cost reduction of INR40/t was achieved in FY25 (~INR75/t on exitFY25 basis). Average cost saving of INR25-30/t will be achieved in FY26, along with full-year benefit of INR75/t.

Outlook

We raise FY26/27E EBITDA by ~4% each on higher volume and better profitability of its UAE plant. EPS estimates are increased by 2%/5% for FY26/27E. JKCE remains one of our preferred picks in the cement sector and we maintain BUY with a TP of INR6,060 (16x Mar’27E EV/EBITDA).