JK Cement Q1 Results Review - Ebitda Inline; Capacity Expansion On Track: Motilal Oswal

Motilal Oswal Report

JK Cement Ltd.’s consolidated Ebitda grew 19% YoY to Rs 4.9 billion (estimate: Rs 4.7 billion), and Ebitda/tonne increased 14% YoY to Rs 1,003 (estimate: Rs 949) in Q1 FY25. The impact of lower grey cement realisation was offset by -

1. higher other operating income; and

2. lower other expenses.

Operating profit margin surged 2.6% YoY to 17.3% (estimate 16.3%). Adjusted PAT increased 49% YoY to Rs 1.9 billion (estimate: Rs 1.5 billion).  Management highlighted its long-term capacity expansion plan of 45- 50 mtpa (versus 24 mtpa currently), including the greenfield expansion at Jaisalmer, followed by brownfield expansions at Muddapur (Karnataka), Panna (MP), and Orrisa plants.

JK Cement reiterated its cost-saving target of Rs 150-200/tonne over the next two years through logistics cost optimisation and the increasing share of green energy and alternative fuel.

We broadly maintain our FY25/FY26E Ebitda. We prefer JK Cement due to its steady expansion and stronger execution strategy versus peers.

We value JK Cement at 15 times June-26E EV/Ebitda to arrive at our target price of Rs 5,150. Reiterate Buy.

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