Cement Stocks Analyzed: PL Capital’s Recommendations

Key Points

• PL Capital recommends buying JK Cement, JK Lakshmi, and JSW Cement.
• JK Cement: ‘Accumulate’ rating, target ₹6,173 per share.
• JK Lakshmi & JSW Cement: ‘Buy’ rating targets ₹891 & ₹143, respectively.
• Cement demand is expected to grow 6.5% over three years.
• New capacity is adding up, limiting industry use to 68-70%.
• Companies are expanding to meet demand, boosting growth potential.

PL Capital has recently started watching three companies that make cement: JK Cement, JK Lakshmi Cement, and JSW Cement. They think these stocks are currently cheaper than they should be, and they have a good feeling about them.

Specifically, PL Capital is recommending that investors “buy” JK Cement, giving it a rating called “Accumulate,” meaning they think the price will go up. Their target price for JK Cement is ₹6,173 for each share. They also suggest buying JK Lakshmi Cement and JSW Cement, setting targets of ₹891 and ₹143 respectively.

Here’s what PL Capital expects to happen with the cement business over the next few years. They believe cement demand will grow at a rate of 6.5% each year, thanks to more homes being built in the countryside. However, more cement factories are being built, which will limit how much cement is actually used.

The problem is that there’s going to be a lot more cement made. Experts predict cement production will grow by 7.7% over the next three years, from 646 million tonnes to around 808 million tonnes. This means there will be more cement available than people need to buy, keeping the price of cement low.

JK Cement is in a good position because it already makes a lot of cement in the North and Central parts of India. They also make special types of cement, like white cement, and other products like wall putty and paint. JK Cement has grown a lot over the past 20 years, increasing its ability to make cement from 3.6 million tonnes to 24.76 million tonnes.

JK Lakshmi Cement plans to increase its ability to make cement to 30 million tonnes by 2030. They are investing money to do this, and they hope to grow even faster in the future by building new factories and expanding their business into new areas. They expect to see increased sales by building a new factory in the North region.

JSW Cement currently makes 21.6 million tonnes of cement and is planning to increase that to 41.85 million tonnes over the next five years. They’re building new factories and expanding their existing ones. They’ll be adding a new factory in Nagaur that will increase their cement-making capacity by 3.5 million tonnes, which will allow them to sell their cement in the North.

“The future of the cement industry is about smart growth and taking advantage of new opportunities.”

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