JK Cement – Market Share Gains, Better Profitability To Drive Re-Rating: ICICI Securities


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In our view, JK Cement Ltd. would emerge as the sixth largest cement group in India with 21 million tonne grey plus white cement / putty capacity by Q3 FY23 with potential to increase the same by more than 50% via brownfield expansion at ~$70/tonne at Panna unit (Madhya Pradesh) in medium term.

Unlike mid-cap peers, it derives nearly 25% Ebitda (Rs 4 billion) from white cement / putty portfolio which provides steady-state cashflow to fund its grey cement expansions.

JK Cement enjoys better grey cement market mix with no exposure to East and less than 10% exposure to South markets where prices remain volatile due to over-supply concerns.

The company continues to gain market share with 9% volume compound annual growth rate over FY13-22E versus less than 5% for industry and is expected to post 12% volume CAGR over FY22-24E.

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