Stock to Buy: Cement stock that can deliver returns of 35%

Synopsis: JK Cements is back in focus after Anand Rathi cited that the stock could ride by another 35% mainly aided by better performance despite weak macro conditions and solid capex plans.

Cement prices have fallen, fuel costs are rising, yet JK Cement continues to stand out. Investors are watching closely, mainly because the company consistently delivers and confidently moves forward with ambitious expansion plans. Here’s what brokers have to say about potential drivers for the stock in the near term, and how its growth might unfold in the future.

With a market capitalization of Rs 43,654 crore, the shares of J K Cements Ltd are currently trading at Rs 5,608 per share, down 5 percent from its previous day’s closing price of Rs 5,885.85 per share. Over the past five years, the stock has delivered a robust return of 170 percent, outperforming NIFTY 50’s positive return of 75 per cent.

Analyst Comments

Anand Rathi Wealth, a notable domestic brokerage house, has maintained its “Buy” call on JK cements and has assigned a target price of Rs 7,545 per share, signalling a significant upside potential of 35 percent from its current market price.

The brokerage cited that JK Cement delivered a strong performance this quarter, despite facing a tough market where cement prices remained weak and petcoke costs increased. Even so, the company managed the situation well. They focused on boosting cement sales and carefully controlled costs, which helped maintain profits even when prices were unfavorable.

Anand Rathi highlighted a significant rise in sales volume, up 21.4 percent year-on-year to 5.77 million tonnes. This growth was driven by robust demand, improved reach in the Central region, and expansion into the East, especially Bihar. As a result, revenue grew 17.3 percent year-on-year to Rs 3,200 crore.

However, there were some headwinds as well, with pricing under strain and a higher share of non-trade sales (now at 40 percent, up from 33 percent in Q2 FY26), realisation fell 3.4 percent year-on-year, and EBITDA per tonne dropped 9.2 percent to Rs 928, though this marks a slight improvement from the previous quarter.

Looking forward, Anand Rathi remains positive, mainly due to JK Cement’s ambitious expansion plans. At present, the company has 28.26 million tonnes of grey cement capacity. This is projected to rise to about 38 million tonnes by FY28, supported by new projects and upgrades. Also, the company aims to have a 50 million tonne cement capacity by 2030 with net debt expected to be increasing because of rising capex.

A key project is a 0.6 million tonne putty plant at Nathdwara in Rajasthan, expected to be completed by Q2 FY27. Management is maintaining its volume target of 20 million tonnes for FY26, with expectations for volume growth of another 12–15 percent in FY27 and FY28, fueled by additional capacity and cost-saving initiatives of Rs 75–100 per tonne over FY26 and FY27.

Conclusion

Anand Rathi believes JK Cement is positioned for growth, despite some short-term challenges like pricing and fuel expenses. The company’s volumes continue to rise, costs are being managed well, and there’s a clear strategy to expand capacity to 38 million tons by FY28. 

This should allow JK Cement to keep gaining market share and improving earnings in the coming years. While cement prices and petcoke or diesel costs still require monitoring, the company’s scale and increasing demand make the long-term outlook favorable.

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