JK Cement Surges 5% as Brokerages Eye ₹7,200 Target

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AuthorRiya Kapoor|Published at:
JK Cement Surges 5% as Brokerages Eye ₹7,200 Target
Overview

JK Cement shares rallied nearly 5.4% Monday, hitting an intraday high of ₹6,100, driven by robust volume growth and positive sentiment. Multiple brokerages, including Choice Institutional Equities, Elara Capital, and Motilal Oswal, reiterated 'Buy' or 'Accumulate' ratings, citing strong operational performance, capacity expansion, and favorable demand trends.

JK Cement Stock Climbs on Analyst Optimism

JK Cement's stock price surged as much as 5.36% on Monday, reaching an intraday high of ₹6,100 per share. The rally occurred despite a broader market downturn, signalling strong investor confidence in the cement maker's prospects. This selective buying underscores expectations of significant earnings triggers ahead.

Brokerage Houses Affirm Bullish Stance

Choice Institutional Equities maintained its 'Buy' rating on JK Cement, setting a target price of ₹7,200. The brokerage highlighted upcoming sector tailwinds, including improving demand and pricing heading into March quarter and FY27. A key pillar of its investment thesis is JK Cement's aggressive capacity expansion, aiming for over 36 million tonnes annual production by FY27 end from approximately 28.7 million tonnes in December 2025. Focus on cost efficiencies through green power adoption and a disciplined leverage strategy, with net debt to EBITDA below 2x, further support the outlook. Choice expects EBITDA to grow at a CAGR of 20.1% over FY25-28E.

Market Share Gains and Operational Efficiency

Elara Capital retained its 'Accumulate' rating with a target of ₹6,249. The firm noted JK Cement's Q3 FY26 EBITDA of around ₹540 crore, which surpassed estimates, driven by stronger-than-anticipated volumes. The company continues to gain market share in Central India, particularly in the non-trade segment. Lower power and fuel costs, coupled with operating leverage benefits, bolstered earnings. Elara also indicated a recovery in JK Cement's UAE operations.

Resilient Demand and Pricing Power

Motilal Oswal reiterated its 'Buy' recommendation with a target price of ₹6,685. The brokerage observed robust industry demand throughout the third quarter, with high plant utilization rates. Motilal Oswal forecasts cement demand growth of 6-7% year-on-year in Q4FY26 and 7-8% in Q1FY27, supported by improving pricing dynamics. A notable ₹15-20 per bag increase in non-trade cement prices is narrowing the gap with trade prices, which is expected to ease margin pressure.

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