Jefferies has reaffirmed its Buy rating on JK Cement, with a target price of ₹5,925, which implies a 9% downside from the current market price of ₹6,500.00. Despite this pricing disconnect, the brokerage remains positive on the company’s fundamentals, following a strong Q1 performance.
EBITDA for the quarter came in at ₹6.74 billion, a 9% beat over Jefferies’ estimates and up 41% year-on-year, driven by better-than-expected realisations and volume growth. The EBITDA per tonne stood at ₹1,250, marginally below ₹1,265 in the previous quarter but ahead of the estimated ₹1,200.
A standout was the 15% YoY growth in grey cement volumes, the highest organic growth among peers, highlighting strong demand traction. Realisations were also up 1% sequentially.
JK Cement has also expanded its capacity by 0.92 million tonnes per annum (MTPA) through debottlenecking at its Ujjain unit (0.5 MTPA) and a strategic acquisition in Jammu & Kashmir (0.42 MTPA). This takes the company’s total cement capacity to 25.26 MTPA.
While the stock currently trades above Jefferies’ target, the brokerage continues to view JK Cement as well-positioned, supported by volume expansion, operational efficiency, and strategic capacity additions.
Disclaimer: The brokerage view is based on publicly available research and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
