4 reasons HDFC Securities recommends 'Add' on JK Cement, raises target

JK Cement share price today: On the bourses, JK Cement share price rose up to 1.21 per cent to an intraday high of ₹6,660 per share.

HDFC Securities on JK Cement: HDFC Securities has raised its target price for JK Cement stock to ₹6,535 per share from ₹6,125, while retaining its ‘Add’ rating on the stock, on the back of strong fundamentals and growth prospects.

 

“We maintain ‘Add’ on JK Cement (JKCE), with a revised target price of ₹6,535 per share (15x September’27E consolidated Ebitda). The company remains on a solid footing,” said Rajesh Ravi, Keshav Lahoti, Riddhi Shah, and Mahesh Nagda of HDFC Securities in a joint note dated September 10.

 

Despite a heavy monsoon impacting construction activities in Q2FY26, analysts believe cement prices have largely held steady on a quarter-on-quarter (Q-o-Q) basis, and JK Cement is expected to deliver high-single-digit grey cement volume growth during the quarter. The company continues to maintain its FY26 guidance of approximately 12 per cent Y-o-Y grey cement volume growth.  CATCH STOCK MARKET LIVE UPDATES TODAY 

On the bourses, JK Cement share price rose up to 1.21 per cent to an intraday high of ₹6,660 per share. At 1:05 PM, JK Cement share price was trading 0.76 per cent higher at ₹6,630.35 per share. In comparison, BSE Sensex was trading 0.17 per cent higher at 81,562.54 levels.

 

Here are the top four factors behind the bullish view:

Q2FY26 trends

 

In the second quarter, management noted that subdued cement demand due to heavy rainfall impacted construction activities. However, grey cement volume is projected to grow in high-single digits, driven by ramped-up production from central capacities. Cement prices remained stable across northern and central operations, with only a slight decline in the south. Fuel prices were stable, though maintenance shutdowns across three kilns added to operating costs. Additionally, aggressive dealer engagement programmes during the quarter increased marketing expenses.

 

Demand outlook

 

JK Cement continues to target annual grey cement volumes of 20 million tonnes (~12 per cent Y-o-Y growth). The company expects rural demand to benefit from GST reductions. Combined putty and white cement volumes are projected to rise 5-6 per cent Y-o-Y, led by an 8 per cent increase in putty volumes, while white cement growth may be slightly impacted by Asian Paints’ captive plant.  ALSO READ | YES Bank shares rise after RBI approves SMBC, SBI board nominees under SPA

Efficient operations

 

HDFC Securities noted JK Cement’s grey cement operations remain highly efficient, with operating expenses around ₹4,050-4,100 per tonne despite marketing spends. Incentive accruals (~₹150-160 per tonne) are strategically used to strengthen brand positioning and expand premium cement sales, which have increased from 10 per cent in FY23 to 15 per cent in FY25. The company achieved 52 per cent green power share in Q1FY26, targeting 58 per cent by the end of FY26. Lead distances have also been reduced, improving logistics efficiency. 

 

These operational improvements, along with premiumisation, contributed to grey cement margin gains of ₹40 per tonne in FY25, with similar gains expected in FY26, analysts noted.

 

UAE operations stabilise

 

The company’s overseas subsidiary in the UAE posted consolidated revenue/Ebitda of approximately ₹600 crore/60-70 crore in FY25, delivering a marginal recurring PAT. With increased sales in Africa, the company is confident of sustaining the turnaround and expects marginal revenue growth to continue in UAE operations.

 

That said, HDFC Securities believes JK Cement’s combination of strong operational efficiency, capacity expansions, green energy adoption, and stable international operations makes it a compelling buy for investors.