HDFC Securities is bullish on JK Cement has recommended buy rating on the stock with a target price of Rs 1425 in its research report dated June 19, 2020.
HDFC Securities' research report on JK Cement
During 4QFY20, grey capacity ramp-up in north moderated covid-led vol loss in 4QFY20. Grey segment’s profit continued to soar in 4Q and in FY20 on robust pricing in north/central and falling energy costs. Similarly, healthy pricing and low fuel cost even firmed up white/putty profitability in 4Q/FY20. Thus, consol net debt/EBITDA in FY20 fell to 2.3x (from 2.5x), despite 6-yr high capex spend.
Outlook
We retain BUY on JK Cement (JKCE) with a TP of Rs 1425. We like the co for its increased grey cement capacity in lucrative north markets and as its white/putty profits continue to firm up (on a high base).
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