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ICICI Securities Report
Our conviction remains intact on JK Cement Ltd. being a top quartile mid-cap player in the cement space is rooted in its:
steady capex offering sustained volume growth visibility;
proven track record of timely project execution, faster ramp-up of new plants and demonstrated cost savings;
scope of ~Rs 150-200/tonne cost reduction (as per management guidance);
reasonably strong balance sheet with net debt/Ebitda in the 1.5 times–two times range (despite capex); and
commendable return on equity of 15–16%.
We continue to value JK Cement at 16 times FY26E enterprise value/Ebitda (at par with industry leader UltraTech Cement) and also value its paints segment at three times FY26E price/sales.
With sector headwinds (of weak cement prices amidst elevated competitive intensity) leaving limited scope to revise up our valuation multiple, we maintain Add on the stock with an unchanged target price of RS 4,818.
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