Buy JK Cement, target price Rs 3020: Axis Securities

Axis Securities has buy call on JK Cement with a target price of Rs 3020. The current market price of JK Cement Ltd. is Rs 2658.2. Time period given by analyst is one year when JK Cement Ltd. price can reach defined target.

JK Cement Ltd., incorporated in the year 1994, is a Mid Cap company (having a market cap of Rs 20517.43 Crore) operating in Cement sector.

JK Cement Ltd. key Products/Revenue Segments include Cement and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2287.31 Crore, down -4.42 % from last quarter Total Income of Rs 2392.98 Crore and up 31.34 % from last year same quarter Total Income of Rs 1741.47 Crore. Company reported net profit after tax of Rs 160.86 Crore in latest quarter.

Investment Rationale
The brokerage expects the company to deliver Volume/Revenue/EBITDA/APAT growth of 11%/15%/17%/15% CAGR over FY22-24E. This will be led by higher cement demand in its operating regions, upcoming capacity, deeper market reach, richer product mix supporting higher realizations, the introduction of margin accretive value-added products, and efficiency gains. The stock is currently trading at 15x and 12x FY23E and FY24E EV/EBITDA. It values JKCL at 13x FY24E EV/EBITDA and assigns a BUY rating to the company with a TP of Rs 3,020/share, implying an upside potential of 13% from the CMP.

Promoter/FII Holdings
Promoters held 45.84 per cent stake in the company as of 30-Jun-2022, while FIIs owned 16.08 per cent, DIIs 21.07 per cent.