JM Financial maintains Buy on JK Cement; raises target price to Rs 5,850

JM Financial has maintained a Buy call on JK Cement with a revised target price of Rs 5,850 (earlier Rs 5,300). The current market price of JK Cement is Rs 5297.75. The time period given by the analyst is a year when JK Cement price can reach the defined target. JK Cement, incorporated in 1994, is a Mid Cap company with a market cap of Rs 40890.36 crore, operating in the Cement sector.

JK Cement's key products/revenue segments include Cement and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 3627.06 crore, up 21.92% from last quarter Total Income of Rs 2974.83 crore and up 15.09% from last year same quarter Total Income of Rs 3151.45 crore. The company has reported net profit after tax of Rs 361.39 crore in the latest quarter.

The company's top management includes Mrs.Sushila Devi Singhania, Ms.Praveen Mahajan, Mr.Sudhir Jalan, Mr.Ashok Sinha, Mr.Ashok Kumar Sharma, Mrs.Deepa Gopalan Wadhwa, Mr.Saurabh Chandra, Mr.Paul Heinz Hugentobler, Mr.Mudit Aggarwal, Mr.Ajay Kumar Saraogi, Mr.Madhavkrishna Singhania, Dr.Raghavpat Singhania, Dr.Nidhipati Singhania, Mr.Rakesh Sethi. Company has S R Batliboi & Co. LLP as its auditors. As on 31-03-2025, the company has a total of 8 crore shares outstanding.


Investment Rationale
JK Cement delivered its highest-ever standalone EBITDA in 4QFY25, registering a robust 35% YoY and 50% QoQ growth to Rs 7.4bn, beating JM Financial's and consensus estimates by ~7% and 16%, respectively, driven largely by lower-than-expected cost/tn. Blended EBITDA/tn rose 17% YoY and 22% QoQ to Rs 1,265 (JM Financial estimate: Rs 1,220). The company remains on track to expand its grey cement capacity to ~30mt by FY26 and 50mt by FY30, supporting strong volume growth and market share gains in the coming years. With structural cost-saving levers of Rs 150-200/tn (Rs 40/tn already achieved in FY25), and despite planned capex of Rs 57 billion through FY28E, the brokerage expects net debt to remain contained at Rs 30 billion-35 billion, supported by healthy cash flow generation. Incorporating the 4Q outperformance and a positive pricing outlook, the brokerage has raised its FY26-27 EBITDA estimates by 4-5% and revised its target multiple to 16.5x (from 16x) with revised Mar'26 target price of Rs 5,850/sh. JK Cement remains JM Financial's top pick in the mid-cap cement space.

Promoter/FII Holdings
Promoters held 45.68 per cent stake in the company as of 31-Mar-2025, while FIIs owned 16.14 per cent, DIIs 24.5 per cent.