BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
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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