JK Cement Q1 Results Review - Good Volumes Growth, Margin Recovery Slower: Centrum Broking

Centrum Broking Report

JK Cements Ltd. reported results largely in line with our estimate at Ebitda level. The company has restated its financials to factor in the effect of amalgamation of its subsidiary Jaykaycem Central Ltd. (recently commissioned Panna and Hamirpur plants) with the parent and as a result, Q1 FY24 and Q4 FY23 numbers have been restated.

On consolidated basis, the company delivered impressive volume growth of 25% for Q1 FY24 on account of ramp-up of Panna and Hamirpur.

JK Cement has achieved utilisation of 75% at its new plants within a short span of nine months. It has also commissioned 22 mega watt waste heat recovery system plant at Panna during the quarter which is likely to improve margins for the company going forward.

We have marginally tweaked our estimates and maintain our target price of Rs 3,164 for JK Cement.

We also maintain our 'Reduce' rating on the stock on account of fair valuations of 12.5 times FY25 enterprise value/Ebitda.

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