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JK Cement To Maintain High Margin Over 2-3 Years: Go India Stocks' Rakesh Arora
- JK Cement Ltd. is predicted to maintain high Ebitda margins over the next 2-3 years, according to Rakesh Arora of Go India Stocks.
- The company is on track to double its capacity to 30 million tonnes by FY26 and aims to reach 50 million tonnes by FY30.
- Arora believes JK Cement's volume growth will be around 7-8% until they make acquisitions to achieve the 50-million tonne target.
- JK Cement's strategic advantages include presence in high price regions with limited limestone availability, portfolio diversification, and brand focus.
- The company's shift to building materials beyond core cement, such as white cement and wall putty, has helped narrow the pricing gap with industry leaders.
- Arora highlights the positive impact of marketing, brand building, and diversification efforts on JK Cement's Ebitda margins.
- Debt is not a concern for JK Cement due to healthy cash reserves, and Arora expects Ebitda margins to rise to around Rs 1,200 per tonne by FY26.
- Arora anticipates a 30% growth in Ebitda margins for the company driven by margin expansion and volume growth.
- While cement prices may dip during monsoon, Arora predicts elevated pricing on a full-year basis due to reduced competition intensity and price increases by industry leaders.
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