JK Cement Share - Value Pick by A. K. Prabhakar

Reco: Buy        Expected Value Rs.404            Nifty Level 5888

• JK Cement  - Multi product and multi region play

• One of the largest cement manufacturers in North India &  second largest producer of white cement in India.

• Known for brands like – JK Cement, Sarvashaktiman, JK Super.

• Expansion plans to be the trigger going forward

Mr. A K Prabhakar

• Grey cement – The company plans to augment its grinding capacity by 3 mn tons at Haryana& Rajasthan.

• White cement – Plans to set up 0.6 mn tons plant in UAE  for Middle East markets.

• Volume and Price increase are the important parameters for the performance

• The company has been enjoying good volume growth compared to its peers and price increase is also helping on the realizations front.

• Consistent dividend payer 20 per cent payout ratio.

Valuations.!

At target price of Rs. 404 the stock would trade at 5.8x FY 14 E EV / EBITDA and at a PE of 9x in the same period.  With expansion plans on track and added advantage of white cement growth will be beneficial for the company’s growth potential going forward

By Mr. A K Prabhakar

Senior Vice President - Equity Research

Anand Rathi

4 th Floor , Silver Metropolis, Jaicoach Compound Opposite Bimbisar  Nagar,

Goregaon(East), Mumbai - 400 063.  India 

Tel No: +91 22 4001 3700, Direct:  +91 22 4001 3999, Fax No: +91 22 4001 3770.

 Website: www.rathi.com

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