HDFC Securities' research report on JK Cement
In Q1FY24, JKCE reported strong 29% YoY grey cement volume growth on a healthy ramp of its Panna capacity (75% utilization). Fuel cost cooled off by INR 150/MT QoQ in Q1, thus driving grey unit EBITDA recovery by INR 130/MT QoQ in Q1. We expect 15% YoY consolidated volume growth in FY24, led by the fast ramp-up of Panna IU in the central region. We estimate ~INR 210/MT YoY improvement in margins in FY24, owing to the sharp cool-off in fuel cost and a greater share of green power. The upcoming expansion in UP and MP will increase grey cement capacity to 24mn MT in FY25E.
Outlook
We maintain our REDUCE rating on JK Cement (JKCE), with an unchanged TP of INR 2,755 (11x Mar-25E consolidated EBITDA).
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