JK Cement Q2 Results Review - Muted Quarter, Expansion To Support Growth; Fair Valuation: Dolat Capital
The company'upcoming 4 mtpa/ 5.5 mtpa strategical expansion into strong pricing markets of North/ Central will benefit it.
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Dolat Capital Report
JK Cement Ltd.’s (standalone) reported volume, revenue, realisation in line, however Ebitda, Ebitda/tonne and adjusted profit after tax above estimates.
JK Cement posted up 16.7% YoY growth in standalone revenue to Rs 21.4 billion in Q2 FY23 led by up 9.4% YoY (up 2.3% QoQ) in volume to 3.64 million tonne coupled with up 6.7% YoY (down 3.4% QoQ) in realisation/tonne to Rs 5,878.
Ebitda/adjusted profit after tax down 9.8%/ down 26% YoY to Rs 3.0 billion/ Rs 1.2 billion due to poor operating performance.
We expect 16.2%/ 17.9%/ 18.3% revenue/ Ebitda/adjusted profit after tax compound annual growth rate over FY22-25E led by 11.0%/ 20.1%/ 14.1% volume growth and 5.7%/ down 1.6%/ -0.8% cement realisation growth in FY23E/ FY24E/ FY25E.
We have switched to evaluating the company on its consolidated financials to reflect the expansion in its subsidiary. Thus, change in estimates is not comparable, though we broadly maintain revenue/ Ebitda estimates for FY23E/ FY24E and introduce FY25E.
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