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Please refer to important disclosures at the end of this report
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JK Cements is engaged in the manufacturing and selling of Cement and
Cement related products and is one of the largest cement players in North
India. The company has a domestic capacity of 10.5MTPA of grey cement,
white cement capacity of 0.6MTPA and 0.7MTPA for putty. The company has
grown its sales revenue by 12.3% in the last 5 years on CAGR basis.
In 1QFY19 also the company reported 15.9% increase in sales to `1,393cr.
This was on the back of better pricing environment in the quarter and a
growth in white cement segment. Going forward, the company will start
commercial production from its new plants in Rajasthan by November,
2019. This will drive the volume sales and help in meeting the demands
from North & South India. Further, a clinker unit is expected to get
commissioned by September 2019 and a 1.5mt split grinding unit is
expected to come up by 3QFY20. These aggressive capex plans give growth
view of the company.
JK Cements has maintained its growth and also focuses on strengthening its
balance sheet. The debt-equity is steadily decreasing. From 2x in FY16, it has
come down to 1.3x in FY19. Simultaneously interest coverage ratio has
improved from 1.3x in FY16 to 2.6x in FY19. ROCE is also maintained in the
range 12-13.4% for the last 3 years. The stock is currently trading at
9.4xEV/EBITDA. The company also pays dividend of average 20%.
Considering the demand-supply scenario and strong outlook for the
company, we recommend BUY.
BUY
CMP `1,026
0.6
Reuters Code
JKCE.BO
JKCE IN
10
BSE Sensex
37,328
Nifty
11,017
Face Value (`)
Cement
Market Cap (` cr)
7,927
52 Week High / Low
1085/650
Avg. Daily Volume
2,941
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
JK Cement Ltd
Others |Cement
Aug 20, 2019
2
JK Cement Ltd| Cement
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement JK Cement Ltd
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)