Buy J K Cement; target of Rs 890: Edelweiss

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26 Aug, 2025 12:21

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  Edelweiss' report on J. K. Cement
"JK Cement’s (JKCE) Q1FY16 EBITDA at INR874mn (down 13% YoY) was broadly in line. While grey cement volumes rose 4% YoY, realisations disappointed—down 7% QoQ (5% our estimate)—with weak prices in North region and Maharashtra. However, the impact was offset by low cost, primarily freight (down 4% QoQ due to benefits of split grinding unit) and other expenses (up just 2% YoY). Grey segment EBITDA stood at INR350mn versus INR503mn in Q1FY15 and INR912mn in Q4FY15. While expected commissioning of the railway siding in Q2FY16 may potentially further reduce freight cost, factoring weak cement prices in Q2FY16, we revise down our FY16E EBITDA for this segment 16%. White segment volume and EBITDA growth remained tepid at 5% YoY each. However, they are expected to gather pace in ensuing quarters; we retain our forward estimates for this segment. While our consolidated EBITDA estimates are revised down ~11% for FY16, we remain optimistic on overall demand and price recovery from H2FY16 and hence broadly retain FY17E EBITDA. Maintain ‘BUY’ with a revised target price of INR890", says Edelweiss research report.

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