Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Hold JK Cement; target of Rs 1348: Emkay Global Financial

Emkay Global Financial recommended hold rating on JK Cement with a target price of Rs 1348 in its research report dated June 18, 2020.

June 19, 2020 / 04:04 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's report on JK Cement

JKCE’s Q4 performance was above estimates, with EBITDA at Rs3.5bn vs. estimated Rs2.9bn and EBITDA/ton at Rs1,298 vs. est. of Rs1,019, led by 1) reversal of dealers’ incentives of Rs200-250mn and 2) lower-than-expected increase in opex/ton. Key positives: 1) Grey cement’s realization growth of 6% qoq (3.6% qoq growth adjusted for reversal of dealers’ incentives), 2) 0.7% yoy rise in opex/ton, lower than estimated rise of 1.7%, 3) EBITDA/ton growth of 33.7% yoy and 4) 1.9x yoy increase in OCF. Management believes that current cement prices are up by Rs10/bag from Q4FY20. It commissioned capacities of 3.5mt in FY20 and balance grinding unit of 0.7mt at Balasinor, Gujarat, will be commissioned in Q3FY21. Capex in FY21 will be restricted at Rs5bn.

Outlook

We raise FY21/22/23E EBITDA by 21.6%/10.5%/15.2% on better realization trends. Cost-saving strategies have yielded results and it is further working on improving operational efficiencies at the North plant. Maintain the Hold rating as we await better entry points.



For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jun 19, 2020 04:04 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347