We recommend a BUY on JK Lakshmi Cement Ltd with a Target Price of Rs. 370, an upside of 8% from CMP of Rs. 343 and Stop Loss of Rs. 325.

JKLC reported revenue growth of 12%YoY mainly driven by volume growth of 16%YoY amid challenging conditions, which was better than industry (de-growth of ~11%YoY). However, blended realisation de-grew by 3.5% YoY. We expect gradual pickup in demand due to relaxation in restrictions and revival in economic activities. Factoring the strong volume growth in the quarter, we increase our volume assumptions and expect revenue to grow by 4%CAGR over FY20-22E. Lower fuel cost supports margins despite pressure on realisation EBITDA margin improved by 200bps to 17.9% mainly due to reduction in costs and...

The company reported healthy operating performance on the back of higher volume, better realization and cost control.The revenue/Ebitda/APAT grew by 12%/25% and 75% on YoY basis. The company recorded healthy EBITDA margin of 18% during the quarter driven by contraction in operating cost

Being a predominantly north (8.2 MT capacity) and central (3.5 MT capacity) player, the company has got a structural advantage of balanced supply and demand environment in these two high growing regions. Further, selfsufficiency in power, through captive power plant (CPP) of 54 MW, waste heat recovery (WHR) plant of 14 MW and solar power plant of 6 MW have helped the company to reduce reliance on costly grid power. The progress on the WHRS Unit-III project at Sirohi is as per schedule and will be commissioned by July 2021. In the eastern region, the company has a 7 MW WHR plant and has recently commissioned a CPP of 20 MW, to become selfsufficient. To increase penetration in the east and reduce freight costs, it has...

JK Lakshmi Cement (JKLC) has reported good set of numbers for 2QFY21 with revenue at Rs10.45bn, up 11.7% YoY and EBITDA at Rs1.87bn, up 25.6% YoY. PAT at Rs806mn increased by 75.5% YoY. Revenue/EBITDA were 12.1%/30.3% ahead of our estimates. EBITDA/mt increased by 8.3% YoY to Rs781 due to tight control on operating costs, which declined by 6% YoY on per mt basis. Volume increased at a healthy rate of 16% YoY to 2.39mn mt. Realization increased by 1.2% QoQ to Rs4,371/mt despite flat pricing QoQ observed in a few markets where the company operates. Given JKLC's geographic mix and cost structure, we believe that its EBITDA/mt will remain at the lower end of the spectrum compared to its peers....

JKLC reported results above estimates on all fronts. JKLC posted 11.7%/ 25.6%/ 75.4% YoY growth in revenue/ EBITDA/ APAT to Rs10.4 bn/ Rs1.9 bn/ Rs806 mn in Q2FY21 led by 15.8% YoY...

the weakness in Eastern region (24% of total volumes). Tight demand-supply market conditions would help sustain margins in North and Gujarat regions. East region would witness flooding of capacity addition over next couple of years. However, we do not expect further deterioration in region's margins due to unsustainable RoEs and industry consolidation. Commissioning of CPP, WHR and split grinding unit at Odisha further boosted the cost competitiveness of its East operations. To factor higher realisations and better growth in volumes, we upgrade our EBITDA estimates of FY21e/FY22e...

JK Lakshmi Cement Limited (JKL)reported strong outperformance for Q2FY2021 earnings led by strong cement volume offtake and reduced opex/tone. JKL's standalone revenues grew 11.7% y-o-y to Rs. 1045 crore led by 15.8% y-o-y rise in cement volume to 2.39 million tone (much higher than our as well as street estimate). The blended realization improved by 1.1% q-o-q (down 3.5% y-o-y) to Rs. 4381/tone. On the opex front, lower power & fuel cost (down 14.9% y-o-y on per tone basis led by lower pet coke prices) and lower freight costs (down 4.8% y-o-y, down 2.1% q-o-q) led to an overall decline in opex/tone at Rs. 3598 (down 5.8% y-o-y, up 0.5% q-o-q). Hence, EBITDA/tone increased by 8.5% y-o-y (up 4% q-o-q) to Rs. 783 (versus our estimate of Rs. 736/tone). Consequently,...

JKLC is a dominant player in the cement industry in its key markets of North and West India and derives 75% of its revenue from these two regions and has a sizeable market presence in the Eastern India also . The total cement capacity of the company stands at 13.3 mntpa.

We initiate coverage on JK Lakshmi Cement Ltd with a BUY recommendation and a Target Price of Rs 339, which implies an upside of 23% from the current levels.

Covid-19 impacts the volumes but better than industry JKLC reported revenue de-growth of 20.8%YoY mainly impacted by volume declines (18%YoY) owing to lock-down restrictions on account of Covid-19. However, the volumes are better than industry (de-growth of ~38%YoY). Blended realisation degrew by 3.4% YoY due to higher than normal percentage of clinker sales (0.3MT Vs 0.11MTYoY). We remain cautious about the demand outlook in the short-term due to current uncertain situation. We factor ~7%YoY decline in volumes in FY21 but healthy double digit recovery in FY22E supported by revival in economic activities. The much awaited brownfield capacity expansion is likely to be announced in the coming quarter...

Higher clinker sales result in weak margins NBIE Values your patronage- Vote for The Team in the Asia Money poll 2020. Click Here JK Lakshmi Cement (JKLC) has reported weak set of numbers for 1QFY21 compared to the industry as higher clinker sales resulted in lower margins. Revenue at Rs8.25bn declined by 21% YoY but was 20% ahead of our estimate. However, despite the beat on revenue, EBITDA at Rs1.43bn was 3% below our estimate. EBITDA/mt was much lower at Rs750 against our expectation of Rs972 and industry average, which is well in excess of Rs1,000. The company...

Focus on cost efficiencies to drive margin expansion Being predominantly a north (8.2MT capacity) and central (3.5 MT capacity) player, the company has got structural advantage of balanced supply and demand environment in these two high growing regions. Further, selfsufficiency in power, through captive power plant (CPP) of 54 MW, waste heat recovery (WHR) plant of 14 MW and solar power plant of 6 MW has helped the company to reduce reliance on costly grid power. In the eastern region, the company has already commissioned its 7 MW WHR plant and has recently commissioned CPP of 20MW, to become self-sufficient. To...

Background: JK Lakshmi Cements (JKLC) is a north Indian Cement player, established in 1982. JKLC has clinker units in Sirohi, Rajasthan and grinding units in Rajasthan, Gujarat and Haryana. The current clinker capacity is 6.2 MTPA and cement capacity is 11.5 MTPA. JKLC derives sales volume from the northern and western regions. The company has market share of ~6-7% in the northern region and ~9-10% in western regions. JKLC is on the spree of capacity expansion;...

We have reduced EBITDA est for FY21/22E by 4/4% each as we factor in higher impact of Covid and build in EBITDA to decline at 3% CAGR during FY20-22E. We value the standalone cement biz at 8x FY22E EBITDA and value its 72.5% holding in Udaipur Cement Works at 20% disc. Thus, our SOTP based TP remains unchanged at Rs 370. We continue to like the co for its large presence in north markets and on increased cost controls. We maintain BUY on JK Lakshmi Cement with a TP of Rs 370. A sharp 16% vol dip in 4QFY20 pulled down FY20 vol by 5% YoY. The Covid impact will further pull down FY21E volume by 16% YoY. However, we build in 21% vol recovery in FY22E. This along with falling energy costs in FY21 to limit standalone EBITDA decline CAGR at 3% during FY20-22E. Healthy cash flows keep leverage comfortable and support capex acceleration FY22E onwards. In 4QFY20, despite lower vols, healthy pricing in the north/Guj markets boosted standalone EBITDA/APAT by 54/133%.

JK Lakshmi Cement reported better-than-expected Q4FY20 numbers. Revenues for Q4FY20 fell 9.5% YoY to | 1,061 crore (vs. I-direct estimates of | 910 crore). Revenues declined on account of a 15.1% drop in volumes YoY to 2.5 MT (vs. I-direct estimate of 2.11 MT). Average realisations for the quarter were at | 4,242 per tonne (vs. I-direct estimate of | 4,320/t). Prices remaining high in north and west supported realisation growth. EBITDA margins of the company expanded 784 bps YoY to 19% while EBITDA/t increased 81% YoY to | 808/t (vs. I-direct estimate of | 650/t) led by...

JK Lakshmi Cement (JKLC) has reported good set of numbers for 4QFY20 with revenue and EBITDA of Rs10.6bn and Rs2bn, respectively, which were ahead of our as well as consensus estimates. The company has reported substantial drop in volume at 16% YoY whereas pricing has been better with 7.9% YoY growth (flat QoQ). JKLC's high exposure to markets in Gujarat and Chhattisgarh is a concern in our view given the weak demand and pricing environment in these two states. The company is operating at full clinker capacity utilization but still does third party clinker sales as according to them it is remunerative compared to sale of cement. The debt level has come down from FY19 level in the absence of capex and it is likely to come down further in FY21. The...

JKLC posted (9.5%)/ 53.9%/ 128.5% YoY growth in revenue/ EBITDA/ APAT to Rs10.6 bn/ Rs2.0 bn/ Rs988 mn in Q4FY20 driven by 7.7% YoY realization growth (-0.5% QoQ). We expect 1.5%/ 0.6%/ (4.3%) revenue/ EBITDA/ APAT CAGR over FY20-22E led by (15.0%)/ 20.0% volume growth and (1.0%)/ 2.0% cement realization growth in FY21E/ FY22E. We reduce our FY21E estimates by 21.1%/ 26%/ 49.4% for revenue/ EBITDA/ APAT primarily due to (-15%) vs. 0.9% volume growth and (1%) vs. 0.7% realization growth to factor extended COVID-19...

The lockdown on account of COVID19 pandemic has impacted the industry volumes significantly due to lack of construction activities. April & May would be a wash out, and assuming gradual relaxation in lockdown and resumption of construction activities, we expect FY21E to end with ~15% volume decline for the industry. We expect JKLC's revenue to decline by ~13% for FY21E due to COVIDF19 impact and lack of capacity additions. The impact of decline in utilization on margin would be partially offset by the benefit of lower pet coke and crude prices. We expect EBITDA margin to decline to 15.1% in FY21E from 15.7% YoY....

We maintain our Target at Rs.380 but downgrade to Accumulate due to recent surge in the stock price. Q3FY20 revenue grew by 7.5%YoY aided by 4.5% YoY growth in realisation while volume growth was 2.8%YoY. EBITDA per ton improved to Rs641 from Rs426 YoY mainly supported by realisation growth and benign cost. Coal linkage in 20MW power plant in East and expected 10MW Waste Heat Recovery will bring additional cost savings. JKLC's current focus is on deleveraging (repayment of ~Rs300p.a)...