JK Cement and Medplus Health Services: Weekly Recommendations

The two stocks recommended by SMC Global Securities’ Research Team this week are JK Cement and Medplus Health Services. These two stocks have shown great potential with positive financial estimates for the next two financial years. So, let’s go through the details of the two stock recommendations for the period between April 28, 2025 and May 2, 2025.

JK Cement Limited

JK Cement share price is ₹5,240.50 (as on April 25, 2025) and its target price is set at ₹6,422 with an upside potential of 23%.

JK Cement Limited: Investment Rationale

• J.K. Cement Limited produces a diverse range of cement and cement-related products, including grey cement, white cement (WhiteMaxX), and allied products like wall putty, gypsum plaster, tile adhesives, grouts, and paints.
• It boasts a grey cement capacity of 24.34 MTPA (including 0.64 MTPA in subsidiaries), white cement and wall putty capacity of 3.05 MTPA (including 0.60 MTPA in subsidiaries), green power capacity of 184.14 MW, and a 32.3 MW waste heat recovery system.
• Recognized for sustainability and certified as a “Great Place to Work,” JK Cement emphasizes environmental responsibility, employee welfare, and community development.
• In Q3 FY25, revenue from operations increased 14% QoQ to ₹2,716 crores. EBITDA surged 79% QoQ to ₹489 crores. The EBITDA margin improved significantly to 18.7% from 11.7% in Q2 FY25.
• Profit before tax grew sharply to ₹295 crores from ₹65 crores in Q2 FY25. Profit after tax stood at ₹205 crores, up from ₹45 crores in Q2 FY25. EBITDA per ton also saw a strong QoQ increase to ₹1,040 from ₹649 in the previous quarter.

• On the capex front, it is expanding its capacity with a 3.3 MTPA clinker facility at Panna and 3 MTPA cement capacity (1 MTPA each at Panna, Hamirpur, and Prayagraj), which is on track for commissioning by December 2025. It has already invested ₹818 crores by December 2024.
• Additionally, a 3 MTPA split grinding unit in Bihar, with ₹350 crores invested is also targeting completion by December 2025. As per the management, future expansions in Jaisalmer and Muddapur are progressing, with regulatory approvals expected to be clarified by June 2025, this positioning the company to meet growing cement demand in India.
• JK Cement plans to acquire a 60% stake in Saifco Cements (0.42 MTPA, Srinagar) for ₹174 crores. The deal, subject to due diligence, includes plans to increase clinker capacity to 1,000 TPD with Rs. 60 crore capex, within 1-1.5 years. Saifco’s 123 million ton limestone reserves offer long-term expansion potential. It would help enhance the profitability and capacity of the company
• According to the management, the modification work at its recently acquired Toshali Plant (Odisha) has been completed and from FY2026 onwards, it plans to operate the plant at full capacity and start generating positive EBITDA.

JK Cement Limited: Shareholding Pattern

Promoters’ shareholding is highest in JK Cement at 45.68%.

JK Cement Limited: Valuation

JK Cement is strategically positioned to benefit from India’s infrastructure and housing boom, with a strong presence in high-growth North and Central markets. The company’s focus on cost optimization, Strategic acquisition, capacity expansion, enhanced market reach and diversification into paints positions it for long-term growth.

Thus, it is expected that the stock may see a price target of ₹6,422 in 8 to 10 months’ time frame on a current P/BV of 7.33x and FY26 BVPS of ₹876.15.

JK Cement Limited: Risk

• Commodity Price Volatility
• Competitive Pressures

Medplus Health Services Limited

Medplus Health Services share price is ₹800.55 (as on April 25, 2025) and its target price is set at ₹933 with an upside potential of 17%.

Medplus Health Services Limited: Investment Rationale

• Medplus Health Services is in the business of pathological laboratory testing and manufacturing, wholesale trading and contract manufacturing of pharma, fast-moving consumer goods and beauty products, and rendering of management services to group companies and holds investments in subsidiary companies.
• The company operates in 13 states and continues to expand its store network while optimizing existing operations.
• In Q3 FY25, the company reported consolidated revenue of ₹1,561.40 crores, up 8.3% YoY but down 0.9% QoQ. Pharmacy operations, comprising 99% of revenue, saw a 12.3% YoY GMV increase.
• Operating EBITDA was ₹79.90 crores, with a 5.1% margin. Stores over 12 months old generated ₹1,438.80 crores, accounting for 94% of pharmacy revenue and achieving an 11% store-level EBITDA margin, reflecting strong operational performance.

• Currently, MedPlus offers over 1,200 carefully selected SKUs spanning across pharmaceutical and non-pharmaceutical categories. Moreover, its private label strategy showed significant progress, with private label sales reaching 19.6% of total revenue, up from 7.9% pre-launch, driven by a 51% average discount rate compared to the overall business’s 16-17% blended rate.
• The management of the company projects a 1% quarterly increase in penetration, targeting 75-77% long-term. The diagnostics segment grew robustly, with revenue rising to ₹27.47 crores from ₹19.60 crores year-on-year, achieving an operating EBITDA of ₹2.21 crores.
• Despite seasonal weakness, it had 1,48,000 active plans and 2,99,000 underlying lives which on-time renewal rate was 26% in Q3 versus 25% in Q2, reflecting steady expansion and operational resilience in the segment.
• It has expanded significantly in Q3 FY25, opening 87 new stores and achieving 379 net additions over the past year. With 205 stores added year-to-date and a target of 300 for the fiscal year, growth remains strong.
• Currently, 27% of stores are under 2 years old, while 73% have operated longer. Notably, stores opened between January and June 2024 reached breakeven within six months, demonstrating rapid operational efficiency.
• On the development front, it has expanded its infrastructure by adding four strategically located warehouses to boost product availability and support new store openings. This move enhances supply chain efficiency. Management anticipates stable or slightly improved gross margins, driven by private label growth, while exploring quick commerce for urban areas without compromising delivery cost efficiency.

Medplus Health Services Limited: Shareholding Pattern

In the overall shareholding of Medplus Health Services, promoters have the highest shareholding at 40.34%.

Medplus Health Services Limited: Valuation

Looking ahead, the management of the company anticipates sustained GMV growth aligned with the pharma market, driven by inflation and market trends, despite a slight branded pharma slowdown due to rising private label sales and seasonality.

It aims to maintain 10-11% store-level EBITDA margins while managing new store cannibalization. With plans for 600 annual store additions and enhanced operational efficiency via new warehouses, management is optimistic about achieving robust growth and operational stability.

Thus, it is expected that the stock may see a price target of ₹933 in 8 to 10 months’ time frame on current P/BV of 5.86x and FY26 BVPS of ₹159.21.

Medplus Health Services Limited: Risk

• Intense Competition and Online Disruption
• Regulatory and Compliance Risks

Conclusion

These two stocks, one from the cement sector and other from the healthcare sector can reach their target price in the coming 8 to 10 months. However, it is always better if you do your analysis before investing and set a stop-loss target. To keep track of your invested stocks, open demat account with SMC Global Securities and invest on the go.

Reference:
https://www.smctradeonline.com/research/wise-money/241

Author: All Content is verified by SMC Global Securities.