JK Cement stock falls 6% on 30% fall in Q1 profit; should you buy, sell or hold JK Cement stock-

JK Cement stock falls 6% on 30% fall in Q1 profit; should you buy, sell or hold JK Cement stock?

JK Cement stock price tanked 2% today to Rs 3,078.6 after the company’s consolidated net profit declined 29.5% on-year to Rs 114.7 crore. However, following the announcement of its first fiscal quarterly earnings, the scrip has tanked 6% to touch lows of Rs 3,060 apiece on Wednesday from Friday’s closing price, before the results were announced.The consolidated EBITDA for Q1FY24 of JK Cement stood at Rs 4.8 billion, up 1% on-year and 17% on-quarter owing to strong volumes and lower costs.

JK Cement recorded a total revenue of ₹2,794 crore for the June quarter, marking an increase on-year from ₹2,287 crore. Meanwhile, total expenditures for the reviewed quarter amounted to ₹2,598 crore, as opposed to ₹2,036 crore in the same period from the prior year.

“We maintain our REDUCE rating on JK Cement (JKCE), with an unchanged TP of INR 2,755 (11x Mar-25E consolidated EBITDA). We estimate ~INR 210/MT YoY improvement in margins in FY24, owing to the sharp cool-off in fuel cost and a greater share of green power. The upcoming expansion in UP and MP will increase grey cement capacity to 24mn MT in FY25E.”

Axis Securities

Buy | Target price : Rs 3560

“Power & fuel costs are expected to reduce by Rs 250-Rs 275 on a per tonne basis in FY24. Furthermore, the operating costs of new units are expected to normalize as utilization further improves in FY24, which will drive EBITDA margins moving ahead. We expect the company to report an EBITDA/tonne of Rs 1,060, higher by 31% YoY and will be driven by higher volumes, stable realizations, and lower costs. We maintain our BUY recommendation on the stock.”

InCred Equities

Hold | Target price: Rs 3324

“JKCE trades at FY24F/25F EV/EBITDA of 15.1x/13.1x, respectively. We like JKCE’s presence and new expansion in the regions having favourable demand and pricing, but we feel the current EV/t limits any further upside in the stock. We retain a HOLD rating on it with a Sep 2024F target price of Rs3,324, set at one-year forward EV/EBITDA of 13.5x (unchanged).”