JKCE’s grey cement business offers volume growth with a favorable regional exposure and an improving cost structure.
JKCE’s white cement/wall putty is a high margin and steady growth business offering strong cash flow visibility.
JKCE’s grey cement capacity of 14.7mt is present in North (65%), Central (10%), West (5%), and South (20%) markets, whereas its white cement/wall putty has a Pan-India presence.
With increased scale of operations, JKCE’s OCF over FY21-FY23E to double vs. average of FY15-FY19 levels and hence, next phase of expansion can be executed via internal accruals.
Overall, JKCE to post volume and EBITDA CAGR of 9% and 7% (high base of 53% y-o-y growth in FY20E) over FY21-FY22E.
The stock currently trades at 7.7x Sep 21E EBITDA, thereby offering attractive risk reward.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
Found this insight useful?
Please share with your friends and family as well. You can also subscribe to one of our channels listed at the bottom of this page.