It Is Recommended to Buy JK Cement at Target of Rs 1234
It is expected that the JK Cement will report Domestic Volume CAGR of 12.8% to 11.3 MnT (Grey + White Cement) over FY17 – 20E. it will also report revenue CAGR of 15.5% to Rs 61.2bn over FY17 – 20E.
Such things will surely drive operating and Net earnings CAGR by 20.8% and 35.6% respectively.
The cement dispatches during the quarter rose by 20.3% YoY.
Grey Cement dispatches increased by 21.5% YoY.
The white cement & wall putty sales during the quarter stood at 0.3Mt.
The blended realisation for the quarter increased by 5.4%, Grey Cement realisation increased by 6.9% YoY, and white cement realisation registered rise of 3.1% YoY.
JK Cement is trading at 10.1x/8.8x, FY19E/20E EV/EBITDA at CMP.
It is recommended to raise your target price to RS 1,234/share.