JK Lakshmi Cement aims to double capacity by 2030 with expansion plans

JK Lakshmi Cement, a cement giant based in New Delhi, India, is set for a robust expansion plan, aiming to double its cement capacity to 30 million tonnes by fiscal year 2030. The move follows a strong performance in the December quarter (Q3FY24), where the company's operating metrics exceeded street expectations, analysts noted.

In the third quarter, the cement company reported consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) of Rs 300 crore, marking a 63 per cent year-on-year (YoY) increase and surpassing estimates by 18 per cent. The company achieved an impressive EBITDA per tonne of Rs 1,021, up 52 per cent from the previous year, and a notable operating profit margin of around 18 per cent.With a vision to exceed its capacity target, JK Lakshmi Cement plans to invest approximately Rs 4,000 crore over the next 2-3 years.

The expansion strategy includes augmenting clinker capacity at its integrated Cement Plant in Durg, Chhattisgarh, and establishing new Cement Grinding Units across various locations. Analysts at Motilal Oswal and Choice Broking remain bullish on JK Lakshmi Cement's prospects. Motilal Oswal raised EBITDA estimates for financial year 2024 (FY24) and financial year 2025-2-26 (FY25-26) by 6 per cent and 2-3 per cent, respectively.

Hence, analysts reiterated ‘buy’ rating on the stock with a target price (TP) of Rs 1,030. Considering these factors, Choice Broking analysts recommended a ‘buy’ rating on the stock, with target price of Rs 1,030 per share.

Source: Republic World