Motilal Oswal's research report on J. K. CementJKCE delivered 28% YoY (21% QoQ) growth in EBITDA to INR1.3b (margins up 1.7pp QoQ/YoY to 14%). Blended EBITDA/ton stood at INR624 (+10% YoY, +7% QoQ). Strength of operations was largely attributable to boost in healthy volumes (Grey 16% YoY, White 11% YoY) and savings in cost offsetting price pressure. PAT stood at INR171m v/s est of INR211m led by higher deferred tax and lower other income. JKCE is one of the preferred play on operating and financial leverage among mid-cap cements and its market mix is well poised to play on tangible volume recovery in north. Post correction, the stock trades at 8.6/6x FY17/18E EV/EBITDA and USD70/t (blended). Maintain Buy with a target price of INR645 (USD85 on blended capacity, 7.5x FY18E grey cement EBITDA and 8x FY18E white cement EBITDA). For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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