JK Cement Posts Yet Another Strong Quarter; Rerating To Continue: ICICI Securities

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ICICI Securities Report

JK Cement Ltd.’s Q3 FY21 standalone Ebitda at Rs 4.5 billion (up 62% YoY), was significantly better than our/consensus estimates led by better realisation and lower costs.

Grey cement volumes grew 25% YoY while blended Ebitda/tonnee rose 30% YoY to Rs 1,417/tonne (our estimate Rs 1,247/tonne).

The company announced greenfield expansion of four million tonne at Panna, Madhya Pradesh, with split grinding unit in Uttar Pradesh, at a capex of Rs 30 billion ($103/tonne).

Given strong operating cash flow of more than Rs 10 billion per annum, net debt is unlikely to increase from the current Rs 20 billion even after factoring above expansion.

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