Dolat Capital Market has given Buy recommendation for JK Cement with a target price of Rs. 2643 in its research report issued on Feb 09, 2021
Dolat Capital Market’s research report on JK Cement
JKCE’s revenue was in line and EBITDA, EBITDA/tn and PAT was above estimates. Volumes and realization were in line and cost lower than estimates. This is the highest ever quarterly revenue, EBITDA, EBITDA/tn and PAT for the company. JKCE posted strong set of numbers with 25.3%/ 61.6%/ 73.2% YoY growth in revenue/ EBITDA/ PAT to Rs17.6 bn/ Rs4.5 bn/ Rs2.4 bn in Q3FY21 led by 23.9% YoY growth in blended volume coupled with increase in blended realization by +1.2% YoY (+0.7 QoQ). We expect 14.0%/ 17.1%/ 20.6% revenue/ EBITDA/ APAT CAGR over FY20-23E led by 18.4%/ 13.5%/ 10.0% blended volume growth and (2.0%)/ 1.3%/ 0.9% blended cement realization growth in FY21E/ FY22E/ FY23E. We increase our revenue and EBITDA estimates by 4.9%/ 4.9%/ 4.9% and 9.7%/ 8.5%/ 9.4% for FY21E/ FY22E/ FY23E factoring 9MFY21 results. Accordingly, we increase our APAT estimates by 15.5%/ 10.2%/ 14.8% for FY21E/ FY22E/ FY23E. We like JKCE because of its sizable presence in higher EBITDA margin contributing white cement & putty business and healthy cash generation & RoE.