August 11, 2016 / 15:08 IST
Religare's research report on JK Cement
JKCE’s Q1 revenue was in line at Rs 8.9bn (+9% YoY), led by volume/blended realisation growth of 5%/4% YoY. On a QoQ basis, realisations were up 7%, led by an 8.7% rise in grey cement pricing. EBITDA/t came in lower at Rs 872 (RCMLe: Rs 957) on higher RM costs and other expenses, while PAT was flat QoQ at Rs 703mn (RCMLe: Rs 769mn). Better prices amid capacity addition in the north should benefit JKCE. We maintain our estimates and roll over to a Sep’17 TP of Rs 830 (from Mar’17 TP: Rs 720).
We maintain our estimates and roll over to Sep’17 TP of Rs 830 (from a Mar’17 TP of Rs 720), set at 8x one-year forward EV/EBITDA. JKCE’s recent 3mn tonne expansion in the region coincides with better prices in the north, auguring well for profitability. Maintain BUY.
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