Buy J K Cement; target of Rs 3260: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on J K Cement

JKCE’s 3QFY23 performance missed our estimates, primarily due to higher costs. Standalone EBITDA came in at INR2.6b (est. INR3.5b), while EBITDA/t stood at INR669 (est. INR886). Adjusted PAT came in at INR1.1b against our estimate of INR1.7b. In 4Q, the management expects fuel costs to decline to the levels of 2QFY23. The ramp-up of its Panna, Madhya Pradesh plant is happening as per expectations and its average utilization in 4Q is expected to be at 50%. Ad spends (INR200m above normal run rate) were high in the quarter.

Outlook

We reduce our FY23 EPS estimate by 14% on weak 3Q and lower cement prices at present. We also lower FY24/25 EPS estimates by 3-5%. We prefer JKCE for its consistent expansion plans. Maintain BUY with a TP of INR3,260 (based on 13.5x Sep’24 EV/EBITDA).

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J K Cement - 09 -02 - 2023 - moti