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ICICI Securities Report
JK Cement Ltd.'s Q3 FY23 Ebitda at Rs 2.6 billion (down 29% YoY) was below our / consensus estimates. Blended realisation dipped ~1% (YoY and QoQ), while total cost/tonne rose 9% YoY (2% QoQ). This led to decline in blended Ebitda/tonne by 40% YoY (18% QoQ) to Rs 669/tonne (our estimate: Rs 896/tonne).
Grey cement volumes showed strong growth of 23% YoY (10% QoQ) to ~3.6 million tonne with capacity utilisation of 93%. White cement (including putty) volumes fell 11% YoY (9% QoQ) to 0.38 mnte.
JK Cement's muted growth in realisation may be attributed to higher despatches in the non-trade segment, whose share improved to 33% in Q3 FY23 from 31% QoQ.
Given the timely completion of 4 mtpa integrated unit at Panna, Madhya Pradesh, and the planned 5.5 mtpa capacity addition by H2 FY25, we estimate a robust compound annual growth rate of ~15% in grey cement volume over FY22-FY25E.
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