Buy JK Cement : target of Rs 3935: ICICI Securities

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26 Aug, 2025 12:21

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ICICI Securities research report on JK Cement

JK Cement (JKCE) announced its plan to diversify into paint business and invest up to Rs6bn in it over the next five years. It plans to leverage its strong (a) JK White cement / putty brand, (b) 50,000+ distribution network of white cement / putty dealers (large portion of which also sells paints), and (c) longstanding relationship with real estate developers. While the company’s diversification into paint business may raise capital allocation concerns (given many entry barriers, heightened competition and probability of minor EBITDA loss in the initial years), it may provide steady-state growth / stable income over the medium term, in our view. Besides, paint is still likely to remain a relatively small business for JKCE and constitute <5% of capital employed, revenue and EBITDA over the next five years.

Outlook

Maintain BUY on the stock with an unchanged target price of Rs3,935/sh (14x FY24E EV/E).

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