Buy JK Cement, target price Rs 3700: ICICI Securities

ICICI Securities has buy call on JK Cement with a target price of Rs 3700. The current market price of JK Cement Ltd. is Rs 3263.55. Time period given by analyst is one year when JK Cement price can reach defined target.

JK Cement Ltd., incorporated in the year 1994, is a Mid Cap company (having a market cap of Rs 25133.04 Crore) operating in Cement sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1741.47 Crore, down -19.68 % from last quarter Total Income of Rs 2168.19 Crore and up 69.90 % from last year same quarter Total Income of Rs 1024.98 Crore. Company reported net profit after tax of Rs 190.09 Crore in latest quarter.

Investment Rationale
JK Cement (JKCE) Q1FY22 EBITDA at Rs4bn (up 86% YoY) was ahead of and consensus estimates led by better grey cement realisation which grew 6% QoQ and lower total costs (up only 1% QoQ). Accordingly, blended EBITDA/te grew 8% QoQ and YoY to Rs1,323/te (I-Sec: Rs1,200). Management is targeting commissioning of 4mnte Panna expansion at a capex of Rs30bn by Mar’23. Net debt is unlikely to increase from the current levels of

Promoter/FII Holdings
Promoters held 57.6 per cent stake in the company as of June 30, 2021, while FIIs held 17 per cent, DIIs 20.5 per cent and public and other 4.9 per cent.