Buy JK Cement; target of Rs 7300: Motilal Oswal

Motilal Oswal's research report on JK Cement

JK Cement’s (JKCE) stock performance has played out broadly in line with our expectations, reflecting its strong track record of consistent operational delivery and disciplined execution. Over the past several years, JKCE has evolved into a structurally stronger business, outperforming peers. The company has a robust pipeline and aims to expand its capacity to 50mtpa by FY30. This target will be achieved through a mix of greenfield and brownfield expansions, with strategic opportunities in Jaisalmer, Muddapur, Panna. In order to drive operation efficiency, the company plans to reduce costs, continue to increase the share of blended cement, use more green energy, and leverage digitalization and automation. In FY25, JKCE realized cost savings of INR40-50/t, and it anticipate further cost savings of INR75/t over the next few quarters. The company aspires to be among the top quartile of sustainable, low-cost cement producers in the industry.

Outlook

We estimate its EBITDA/t at INR1,210/INR1,230/INR1,280 in FY26/FY27/FY28 vs. INR1,010 in FY25 (avg. INR1,090 over FY20-24). Given the company’s increasing scale of operations, strong execution strategy, and cost-reduction initiatives, we value it at 18x Jun’27E EV/EBITDA (premium to its long-term average) to arrive at our TP of INR7,250. We reiterate our BUY rating on the stock.

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