JKCEMENT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | JKCEMENT | Market Cap | 42,331 Cr. | Current Price | 5,478 ₹ | High / Low | 7,566 ₹ |
| Stock P/E | 38.6 | Book Value | 833 ₹ | Dividend Yield | 0.27 % | ROCE | 14.5 % |
| ROE | 14.6 % | Face Value | 10.0 ₹ | DMA 50 | 5,718 ₹ | DMA 200 | 5,773 ₹ |
| Chg in FII Hold | -0.68 % | Chg in DII Hold | 0.75 % | PAT Qtr | 211 Cr. | PAT Prev Qtr | 176 Cr. |
| RSI | 43.6 | MACD | -42.5 | Volume | 20,657 | Avg Vol 1Wk | 1,41,125 |
| Low price | 4,219 ₹ | High price | 7,566 ₹ | PEG Ratio | 9.01 | Debt to equity | 0.99 |
| 52w Index | 37.6 % | Qtr Profit Var | 5.47 % | EPS | 143 ₹ | Industry PE | 30.0 |
📊 Financials: JKCEMENT reflects moderate fundamentals with ROCE at 14.5% and ROE at 14.6%, showing average efficiency in capital utilization. Debt-to-equity ratio of 0.99 highlights significant leverage compared to peers. Quarterly PAT improved from 176 Cr. to 211 Cr., indicating growth momentum, though overall profit variation is modest at 5.47%. EPS of 143 ₹ demonstrates consistent earnings capacity, but cash flow strength may be pressured by debt obligations.
💹 Valuation: Current P/E of 38.6 is higher than the industry average of 30.0, suggesting overvaluation. P/B ratio is ~6.6 (Current Price / Book Value), which is expensive relative to sector norms. PEG ratio of 9.01 signals weak growth prospects compared to valuation. Intrinsic value appears lower than CMP, limiting margin of safety for new investors.
🏢 Business Model & Competitive Advantage: The company operates in the cement industry, benefiting from infrastructure and housing demand. Its strengths include scale, established brand presence, and diversified geographic operations. However, high debt levels and modest return ratios reduce its competitive edge compared to leaner peers.
🎯 Entry Zone Recommendation: Current price of 5,478 ₹ is below DMA 200 (5,773 ₹), reflecting weakness. A more attractive entry zone would be around 4,500–4,800 ₹ (closer to 52-week low of 4,219 ₹), offering better risk-reward. Long-term investors should accumulate only on dips, given stretched valuations and debt levels.
Positive
- Quarterly PAT growth from 176 Cr. to 211 Cr.
- EPS of 143 ₹ indicates consistent earnings power.
- DII holdings increased by 0.75%, showing domestic institutional confidence.
- Strong brand presence in the cement industry with diversified operations.
Limitation
- High debt-to-equity ratio of 0.99 increases financial risk.
- P/E of 38.6 above industry average (30.0), suggesting overvaluation.
- PEG ratio of 9.01 indicates poor growth relative to valuation.
- Weak technical indicators (RSI 43.6, MACD -42.5) show bearish sentiment.
Company Negative News
- High leverage raises concerns about debt servicing capacity.
- FII holdings decreased by 0.68%, reflecting reduced foreign investor confidence.
Company Positive News
- Quarterly profit growth of 5.47% shows operational improvement.
- DII inflows suggest domestic support for the stock.
- Positioned to benefit from infrastructure and housing demand in India.
Industry
- Cement industry P/E at 30.0 reflects moderate valuations.
- Strong demand drivers from infrastructure and real estate sectors.
- Industry growth supported by government spending on housing and roads.
Conclusion
⚖️ JKCEMENT has stable earnings and industry positioning but faces challenges with high debt and stretched valuations. Current price offers limited upside, and accumulation is advisable only near 4,500–4,800 ₹ for better margin of safety. Long-term holding may yield moderate returns, supported by infrastructure demand, but investors should remain cautious due to leverage and valuation risks.
Would you like me to also add a technical support/resistance chart summary so you can align entry timing with this fundamental view?