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.

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