JK Lakshmi Cement Ltd. share price target

Operational performance: Average realization was up Rs 120/ton QoQ at Rs 4,070/ton (flat QoQ adjusted for freight cost). The realization is good as (1) Q2 is a seasonally weak quarter both in terms of volumes and cement prices

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...

Stable quarter; cost saving initiatives to benefit in FY19 For 2QFY18, JK Lakshmi reported volumes in line with our estimates at 1.89MnT, +10% YoY, primarily on higher capacity vs. the base quarter. Realisations rose 8% YoY (sequential growth of 3.5%) primarily on a change in the sales pattern from Ex works to FOR. EBITDA/t at INR 505/t declined 7.4% YoY as the rise in power/fuel and freight costs more than offset realisations growth. It commissioned 7.5MW of WHR at its Durg unit, benefits of which would be seen going forward (c.INR 50/t in east). In addition, management expects c.INR 200/t cost saving from 20MW captive thermal power plant (4QFY19 commissioning). In the...

JK Lakshmi Cement reported a mixed set of Q2FY18 numbers. While revenues were above our estimates, margins and PAT remained below our expectations. Revenues increased 18.5% YoY to | 776.7 crore (below I-direct estimate of | 719.4 crore) led by 10% YoY increase in volume to 1.9 MT (vs. I-direct estimate of 1.9 MT) mainly due to healthy demand in the company's key markets. Realisation increased 7.7% YoY at | 4,110/t (vs. I-direct estimate of | 3,868/t) EBITDA/tonne fell 7.4% YoY to | 505/tonne (vs I-direct estimate of |...

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 as on FY17 and is one of the most cost efficient players. JKLC reported a healthy revenue growth of 15.9% in Q1FY18 aided by 8% growth in volume and strong 12.6% growth in realisation. EBITDA grew marginally by 2.4% YoY due to sharp increase in fuel cost. EBITDA margin declined by 170bps YoY, but increased by 450bps QoQ. Management expects pet coke prices to soften going forward which is...

Operational performance: Average realization was up Rs 415/ton QoQ mainly due to high cement prices in North and West regions. Cost/ton was higher by Rs 200/ton QoQ largely due to higher power & fuel cost (rising pet coke prices). EBITDA/ton was Rs 530 vs. Rs 310 in Q4FY17 and Rs 560 in Q1FY17.

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 Cements reported a mixed set of Q1FY18 numbers. Revenues increased 15.9% YoY to | 901.1 crore (above I-direct estimate of | 868.6crore) led by 8% YoY increase in volumes to 2.28 MT (vs. I-direct estimate: 2.3 MT) mainly due to healthy demand in east. Realisation also increased 7.4% YoY at | 3,949/t (vs. I-direct estimate: | 3,803/t) due to better pricing scenario in north However, EBITDA/tonne declined 5.2% YoY to | 527/tonne (below Idirect estimate: | 569/t). This was mainly led by higher power & fuel cost/t (up 46.2% YoY) due to a rise in pet coke prices that increased...

Healthy Performance on Strong Realisation & Volume JK Lakshmi Cement (JKLC) has reported a better-than-estimated operational performance in 1QFY18 mainly on account of higher-than-estimated sales volume and robust recovery in realisation. EBITDA increased by 3% YoY and 68% QoQ to Rs1.2bn vs. our estimate of Rs940mn mainly on account of strong realisation (+7% YoY and +12% QoQ) and 8% YoY increase in sales volume to 2.29mnT including 0.35mnT clinker. Operating cost/tonne grew by 9% YoY and 6% QoQ to Rs3,414 mainly due to 30% YoY and +6% QoQ increase in Power & Fuel cost/tonne to Rs874. EBITDA/tonne stood at Rs527 in 1QFY18 vs. Rs556 and Rs312 in 1QFY17 and 4QFY17,...

EBITDA down 17% YoY at Rs 716 mn was below consensus and our estimates. Average realization was broadly flat QoQ at Rs 3,525/ton, as cement price rise in Northern region was offset by weak prices in Eastern region.