JK Cement’s (JKCE) Q4FY20 standalone EBITDA grew 24% YoY to Rs3.5bn, above our / consensus estimates owing to better grey cement realisation which increased 10% YoY / 6% QoQ (I-Sec: 2.3% QoQ). Blended EBITDA/te rose sharply 34% YoY to Rs1,298/te (I-Sec: Rs1,105/te). Recent commissioning of new capacity at Mangrol is likely to further improve cost structure / profitability. With majority of the planned capex (Rs12.4bn) done in FY20, consolidated net debt has peakedout at Rs23.3bn in FY20 and unlikely to increase over FY21-22E, in our view.
OutlookFactoring better realisation, we raise our FY21E-FY22E EBITDA by 6% and EPS by 23% and increase our target price to Rs1,460/share (earlier Rs1,260/share) based on unchanged 9x FY22E EV/E. Maintain BUY.
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