Dolat Capital is bullish on JK Cement has recommended buy rating on the stock with a target price of Rs 1234 in its research report dated February 20, 2018.
Dolat Capital's report on JK Cement
JK Cement reported a revenue of ` 11.2bn (+26.8% YoY, +1.7% QoQ), 2% higher than D’est. The cement dispatches during the quarter rose by 20.3% YoY (+4.5% QoQ). Grey Cement dispatches increased by 21.5% YoY (+5.1% QoQ). The white cement & wall putty sales during the quarter stood at 0.3Mt (+12.5% YoY, flat on QoQ). The blended realisation for the quarter increased by 5.4% YoY (-2.7% QoQ), Grey Cement realisation increased by 6.9% YoY (-3.2% QoQ), and white cement realisation registered rise of 3.1% YoY (2.0% QoQ).
Outlook
We expect JK Cement to report Domestic Volume CAGR of 12.8% to 11.3 MnT (Grey + White Cement) over FY17 - 20E and Revenue CAGR of 15.5% to ` 61.2bn over FY17 - 20E. These would drive operating and Net earnings CAGR by 20.8% & 35.6% respectively. At CMP JK Cement is trading at 10.1x/8.8x, FY19E/20E EV/EBITDA. We roll over to FY20E and raise our target price to RS 1,234/share.For all recommendations report, click here
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