JK Cement: Accumulate Rating, Rs 6199 Target by Prabhudas Lilladher

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AuthorAarav Shah|Published at:
JK Cement: Accumulate Rating, Rs 6199 Target by Prabhudas Lilladher
Overview

Prabhudas Lilladher maintains an 'Accumulate' rating on JK Cement, raising the target price to Rs 6199. The cement maker posted inline EBITDA for Q3FY26, bolstered by a significant 23% year-on-year jump in grey cement volumes. Strong demand in non-trade segments and expansion in Eastern markets drove this growth, though blended realisations saw a 4% sequential dip.

Brokerage Maintains 'Accumulate' on JK Cement, Raises Target to ₹6,199

Building on the 'Accumulate' rating and a raised target price of ₹6,199 by Prabhudas Lilladher, JK Cement's Q3FY26 performance revealed robust grey cement volume growth of 23% year-on-year. This expansion was underpinned by a strong demand uptick in the non-trade segment during December 2025 and an extended market presence in the Central and Eastern regions. While blended realisations experienced a sequential decline of 4% quarter-on-quarter, management observations suggest an improving trade-to-non-trade pricing gap in early January 2026, which should alleviate pressure on trade prices.

Q3 Performance Drivers and Cost Management

Despite the moderation in EBITDA per tonne to ₹928 (a 7% year-on-year decrease), the company's operational efficiency was maintained through stringent cost control measures. These initiatives included lower packing and freight costs, driven by a more favourable fuel mix. Additionally, a sharp decline in other operating expenses contributed positively, largely owing to significant benefits derived from strong operating leverage.

Outlook and Valuation

JK Cement projects industry growth to be around 6-7% in Q4FY26, acknowledging a high base from the previous year. The company anticipates outperforming this industry average. Prabhudas Lilladher forecasts JK Cement to achieve a Compound Annual Growth Rate (CAGR) of 22% for EBITDA and 13% for volumes between fiscal years 2025 and 2028. Currently, the stock trades at an Enterprise Value (EV) of 16.5x and 14.1x its estimated EBITDA for FY27E and FY28E, respectively. The revised target price of ₹6,199 implies a valuation of 15x EV of its March 2028E EBITDA.

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