JK Lakshmi Cement Ltd. share price target

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; recently...

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 10.9 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; recently...

JK Lakshmi Cement (JKLC) has reported a soft operational performance in 4QFY18 mainly on account of lower-than-expected sales volume and cost pressure. While EBITDA expanded by 42% YoY and 7% QoQ to Rs1.02bn (vs. our estimate of Rs1.16bn), EBITDA/tonne stood at Rs454 compared to Rs312 and Rs447 in 4QFY17 and 3QFY18, respectively. Operating cost per tonne surged by 11% YoY and 1% QoQ to Rs3,565 mainly led by sharp rise in freight cost/tonne (+16% YoY and +4% QoQ) and Power & Fuel cost/tonne (+8% YoY and -1% QoQ). Sales volume stood at 2.23mnT (-2.5% YoY and +6% QoQ). While Durg sales volume grew by 18% YoY to 0.63mnT, Northern volume de-grew during the quarter. Net profit stood at Rs334mn compared to Rs209mn...

JK Lakshmi Cement's Q4FY18 results were marginally below our estimates. The beat at topline level led to lower-than-expected profitability. Revenues increased 11.2% YoY to | 897.0 crore (below I-direct estimate of | 1,021.4 crore) mainly led by 14.1% YoY increase in realisation to | 4,019/t (vs. I-direct estimate of | 4,095/t) while volumes declined 2.5% YoY to 2.2 MT (vs. our estimate of 2.02 MT) EBITDA margin increased 242 bps YoY to 11.3% due to decline in raw material cost (down 14.4% YoY), improvement in power...

Strong revenue growth, but fuel cost surge impact margins JK Lakshmi Cement (JKLC) is part of JK group mainly focused in North, West and Eastern regions of India with a consolidated capacity of 12.5MT (FY17). JKLC reported a strong revenue growth of 24.8% for Q3FY18 aided by healthy growth in volumes at 15% YoY and 8% YoY growth in realisation. EBITDA grew by 14%YoY, however EBITDA margin declined by 100bps YoY to 11.3% due to steep increase in fuel and freight cost. JKLC commissioned 7.5MW WHR in Q3FY18 and is commissioning 20MW...

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 10.9 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; recently...

JKLC's volume grew 15% YoY (+12%QoQ) to 2.11mt v/s our estimate of 2.02mt, led by ramp-up of new capacity in east. Realizations rose 9% YoY (-3.4% QoQ) to INR3,969/t, lower than our estimate of INR4,259/t, due to weaker pricing in focus regions. Revenue grew 25% YoY (+8% QoQ) to INR8.4b (est. of INR 8.6b). EBITDA grew 14%YoY (-1% QoQ) to INR943m v/s estimate of INR1.2b (margin: 11.3%, -1.05ppYoY, -1.02pp QoQ), translating into EBITDA/ton of INR447 (flat YoY, -INR58/t QoQ) v/s estimates of INR576/t. Tax rate was 32.5% in 3Q v/s tax inflow ofINR27m. Net profit stood at INR86m (+13% YoY) v/s estimate of INR301m

Subdued cashflow and return ratios outlook intact; SELL JK Lakshmi Cement (JKLC) delivered 25%/14%/13% standalone revenue/EBITDA/PAT growth in Q3FY18. Ramp-up in east buoyed volume growth to 15% YoY. However, high energy and freight cost inflation amid lack of operating leverage gains offset realisation benefits, leading to subdued EBITDA of Rs447/MT. We maintain our anticonsensus SELL on the stock with a revised TP of Rs340, as we see (1) volume growth tapering off to 2% CAGR during FY19/20, (2) subdued operating cashflow to mute...

JK Lakshmi Cement reported a mixed set of Q3FY18 numbers. While revenues were in line with our estimates, margins, PAT stayed below our estimates. Revenues increased 24.8% YoY to | 837.4 crore (vs. Idirect estimate of | 828.8 crore) mainly led by 15% YoY increase in volumes to 2.1 MT (vs. I-direct estimate of 2.0 MT) driven by healthy demand in company's key markets. Realisation increased 8.5% YoY to | 3,983/tonne (vs. I-direct estimate of | 4,095/t) On the margin front, the EBITDA margin declined 105 bps YoY to 11.3% (below I-direct estimate of 12.1%). EBITDA/tonne declined...