Broker’s Call: JK Cement (Hold)

Target: ₹4,900

CMP: ₹4,834.40

JK Cement’s Q3 grey cement volume grew about 4 per cent year on year to 4.87 million tonnes (mt) as volume increased in the central India region due to expansion and with no plant shutdown impacting operations. Improving prices and rising premium product sales (about 16 per cent) improved grey cement realisation by about 1 per cent quarter on quarter in Q3. White cement realisation also showed an improvement as the performance in Fujairah recovered.

Currently, northern and central region prices are up marginally vs Q3 average prices, as per the management. JK Cement expects to grow 7-8 per cent in Q4FY25F and by at least 10 per cent in FY26F.

Capex to be at ₹1,900 crore in FY25F (incurred ₹1,400 crore in nine months) and about ₹1,900 crore in FY26F, including ₹170 crore for the recently-acquired Saifco Cements in J&K with a cement capacity of 0.42 mtpa. All expansion plans are progressing as per schedule and JK Cement expects to add 6mtpa grey cement capacity in FY26F, taking the total capacity to 30mtpa. After this, the company plans to raise the capacity to about 50 mtpa by FY30F; options to expand are at Jaisalmer (Rajasthan), Muddhol (Karnataka), Panna (Madhya Pradesh) and Toshali (Odisha).

We like JK Cement’s presence and new expansion into regions having favourable demand and pricing, but we feel the current EV/t still limits any further upside in the stock price. We retain our Hold rating on it with a March 2026F target price of ₹4,900, set at an EV/EBITDA of of 15x.