Buy JK Cement; target of Rs 6064: Prabhudas Lilladher

What happened

Prabhudas Lilladher maintained a BUY rating on JK Cement with a revised target price of Rs 6,064. JK Cement reported 19% year-on-year grey cement volume growth in Q2FY27, helped by new capacity in Bihar.

Confirmed

Global impact / market context

The target price shows the broker still expects gains. Volume growth of 19% means JK Cement sold far more cement than a year earlier, which can spread fixed costs across more bags and support profit.

Analyst inference

Cement prices rose about INR20 per bag since mid-September, which may lift realisations, meaning the average price received per bag. However, higher pet coke and diesel costs are pressure points, and management expects power and fuel costs to rise further.

Analyst inference

What to watch

1. Management expects power and fuel costs to increase by INR80-90 per tonne in each of Q3FY27 and Q4FY27, which could pressure profit per tonne if cement prices do not rise enough. Confirmed
2. The report suggests further cement price hikes of INR10-15 per bag may be required to fully offset cost inflation, so whether those hikes happen is a key item to track. Proposed
3. Management maintained its FY27 grey cement volume guidance of about 23mt. Investors should track whether actual volumes meet this stated target, since falling short could weaken revenue growth. Confirmed

Evidence

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